Impact of Evergrande Causes China's Housing Prices to Fall for First Time in 6 Years... "Entering a Downward Cycle" (Comprehensive)

[Image source=Yonhap News]

[Asia Economy Reporter Cho Hyun-ui] As the possibility of bankruptcy of Evergrande Group, China's second-largest real estate developer, rises, China's housing price index recorded a decline for the first time since April 2015.

Bloomberg reported on the 20th that "China's September housing price index fell by 0.08% compared to the previous month."

September is usually the most active period for housing transactions in China. However, it appears that Evergrande's default crisis and other factors have had an impact.

Bloomberg stated, "China's real estate market has fallen into a slump," adding, "Due to the aftermath of the Evergrande incident, developers are not making profits, and consumers are withdrawing from the market." It further added, "The decline in housing prices could fuel a vicious economic cycle."

A Chinese real estate expert diagnosed, "China's real estate sector has already entered a downward cycle." He added, "The decline in China's housing market usually lasts about eight months," and "The urgent task now is to avoid a panic state."

Meanwhile, Evergrande will officially default if it fails to repay the $83.5 million (approximately 99.3 billion KRW) interest on the dollar bonds maturing on March 23, 2022, within the 30-day grace period after the payment deadline on the 23rd of last month.

This content was produced with the assistance of AI translation services.