A banner promoting the Emerald Bay residential project outside the China Evergrande Centre in the Wan Chai area of Hong Kong, China, on Friday, July 23, 2021.
Lam Yik | Bloomberg | Getty Images
BEIJING — Chinese authorities called for indebted property giant Evergrande to resolve its debt risks during a rare meeting with executives Thursday.
Shares of Hong Kong-listed China Evergrande Group have tumbled more than 60% this year to near four-year lows as investors worried about the developer’s ability to repay its debt. The stock closed 1.6% lower Friday, giving up initial gains.
The People’s Bank of China said Thursday in an online statement that it, along with the China Banking and Insurance Regulatory Commission, told Evergrande executives they need to implement the central government’s strategy for stable and healthy development of the real estate market.
The statement added Evergrande needs to “actively resolve” debt risks, support financial stability and disclose true information in accordance with regulations, according to a CNBC translation of the Chinese text.
The comments come a few days after Chinese President Xi Jinping said at a high-level economic policy meeting that the country needs to prevent major financial risks.
As one of China’s largest privately run real estate conglomerates, Evergrande sits at the intersection of major concerns for Beijing: speculation in the property market, high debt levels and the sustainability of an industry that fuels more than a quarter of GDP.
Evergrande has more than 240 billion yuan ($37 billion) in bills and trade payables — such as materials — to settle with contractors over the next 12 months, S&P Global Ratings said earlier this month. About 100 billion yuan, or just over 40%, is due by the end of December, S&P said.
The ratings agency downgraded Evergrande and its subsidiaries to “CCC” from “B-” on Aug. 5 on expectations the conglomerate’s “nonpayment risk is escalating because of increased asset freezes from various commercial parties, indicating strained liquidity.”
“The negative outlook reflects Evergrande’s increasing strained liquidity and nonpayment risk. It also reflects our view that its asset disposal plan, though potentially substantial, lacks visibility or certainty,” S&P said in a note.
An analyst was not available Friday to comment on the meeting with regulators.
Chinese authorities have been trying to limit speculative activity in the property market, which, together with related industries such as construction, accounts for more than a quarter of China’s GDP, according to Moody’s estimates published in a late July report.
Beijing is particularly concerned about a buildup in debt used to fuel property development. In the last year, three “red lines” have emerged for limiting the amount of debt real estate companies can hold relative to their assets.
The latest developments around Evergrande reflect authorities’ focus on limiting risks in the real estate market with greater regulation for the rest of this year, said Bruce Pang, head of macro and strategy research at China Renaissance.
“A favorable regulatory environment and fine-tuning policy curb are crucial to decide whether Evergrande could ride out its crisis smoothly,” Pang said. “Investors will closely follow the potential deals for signs on how much leniency Evergrande has won from Beijing, [regarding] the property sector’s liquidity issues amid a campaign to balance between curbing financial risks and securing social stability.”
The Chinese regulators’ meeting with Evergrande comes as Beijing has accelerated its regulation of different fast-growing industries — primarily tech-related — in the last year.
In early November, the central bank, banking and insurance regulator and other departments met with Alibaba founder Jack Ma and executives of financial technology giant Ant Group. A few days later, Ant had to suspend its massive IPO, and began a series of meetings with regulators that has forced the company to restructure as a financial holding company.
Previously, in the last few years, Chinese authorities have stepped in to limit the debt-fueled expansion of conglomerates such as airline operator HNA and insurance company Anbang.
Rising household debt
Reducing property market risks is even more critical for China since the majority of household wealth is tied up in real estate, at about 70% to 80%, according to Moody’s estimates. The report added about 10% of total household income is related to property.
While authorities have repeatedly stressed that “houses are for living in, not speculation,” Chinese households’ greater preference for investing in property than stocks or other assets has contributed to rising real estate prices.
The balance of consumer housing loans has only climbed over the last several years, to reach 36.6 trillion yuan as of the end of June, according to official data. The 13% year-on-year growth rate was slower than the 14.5% rate of 2020.
The inability of the property market to serve individual housing needs has contributed to a rapid rise in household debt, said Liu Xiangdong, deputy director of the economic research department at the China Center for International Economic Exchanges based in Beijing.
He noted China’s property issues are tied to the education system’s problems. Parents anxious to send their children to top schools have bid up nearby housing prices — which local authorities such as those in Beijing have tried to push back on.
For Evergrande, residential real estate development remains one of its major businesses, but the company has climbed into the ranks of Fortune’s Global 500 list and expanded into industries such as film and entertainment, life insurance and spring water. Evergrande backs Guangzhou’s soccer team and has an electric car unit.
MONTREAL – Two Quebec real estate brokers are facing fines and years-long suspensions for submitting bogus offers on homes to drive up prices during the COVID-19 pandemic.
Christine Girouard has been suspended for 14 years and her business partner, Jonathan Dauphinais-Fortin, has been suspended for nine years after Quebec’s authority of real estate brokerage found they used fake bids to get buyers to raise their offers.
Girouard is a well-known broker who previously starred on a Quebec reality show that follows top real estate agents in the province.
She is facing a fine of $50,000, while Dauphinais-Fortin has been fined $10,000.
The two brokers were suspended in May 2023 after La Presse published an article about their practices.
One buyer ended up paying $40,000 more than his initial offer in 2022 after Girouard and Dauphinais-Fortin concocted a second bid on the house he wanted to buy.
This report by The Canadian Press was first published Sept. 11, 2024.
MONTREAL – The Quebec Professional Association of Real Estate Brokers says Montreal-area home sales rose 9.3 per cent in August compared with the same month last year, with levels slightly higher than the historical average for this time of year.
The association says home sales in the region totalled 2,991 for the month, up from 2,737 in August 2023.
The median price for all housing types was up year-over-year, led by a six per cent increase for the price of a plex at $763,000 last month.
The median price for a single-family home rose 5.2 per cent to $590,000 and the median price for a condominium rose 4.4 per cent to $407,100.
QPAREB market analysis director Charles Brant says the strength of the Montreal resale market contrasts with declines in many other Canadian cities struggling with higher levels of household debt, lower savings and diminishing purchasing power.
Active listings for August jumped 18 per cent compared with a year earlier to 17,200, while new listings rose 1.7 per cent to 4,840.
This report by The Canadian Press was first published Sept. 6, 2024.
In the quest to find cities where renters can enjoy the best of all worlds, a recent study analyzed 24 metrics across three key categories—Housing & Economy, Quality of Life, and Community. The study ranked the 100 largest cities in Canada to determine which ones offer the most to their renters.
Here are the top 10 cities that emerged as the best for renters in 2024:
St. John’s, NL
St. John’s, Newfoundland and Labrador, stand out as the top city for renters in Canada for 2024. Known for its vibrant cultural scene, stunning natural beauty, and welcoming community, St. John’s offers an exceptional quality of life. The city boasts affordable housing, a robust economy, and low unemployment rates, making it an attractive option for those seeking a balanced and enriching living experience. Its rich history, picturesque harbour, and dynamic arts scene further enhance its appeal, ensuring that renters can enjoy both comfort and excitement in this charming coastal city.
Sherbrooke, QC
Sherbrooke, Quebec, emerges as a leading city for renters in Canada for 2024, offering a blend of affordability and quality of life. Nestled in the heart of the Eastern Townships, Sherbrooke is known for its picturesque landscapes, vibrant cultural scene, and strong community spirit. The city provides affordable rental options, low living costs, and a thriving local economy, making it an ideal destination for those seeking both comfort and economic stability. With its rich history, numerous parks, and dynamic arts and education sectors, Sherbrooke presents an inviting environment for renters looking for a well-rounded lifestyle.
Québec City, QC
Québec City, the capital of Quebec, stands out as a premier destination for renters in Canada for 2024. Known for its rich history, stunning architecture, and vibrant cultural heritage, this city offers an exceptional quality of life. Renters benefit from affordable housing, excellent public services, and a robust economy. The city’s charming streets, historic sites, and diverse culinary scene provide a unique living experience. With top-notch education institutions, numerous parks, and a strong sense of community, Québec City is an ideal choice for those seeking a dynamic and fulfilling lifestyle.
Trois-Rivières, QC
Trois-Rivières, nestled between Montreal and Quebec City, emerges as a top choice for renters in Canada. This historic city, known for its picturesque riverside views and rich cultural scene, offers an appealing blend of affordability and quality of life. Renters in Trois-Rivières enjoy reasonable housing costs, a low unemployment rate, and a vibrant community atmosphere. The city’s well-preserved historic sites, bustling arts community, and excellent educational institutions make it an attractive destination for those seeking a balanced and enriching lifestyle.
Saguenay, QC
Saguenay, located in the stunning Saguenay–Lac-Saint-Jean region of Quebec, is a prime destination for renters seeking affordable living amidst breathtaking natural beauty. Known for its picturesque fjords and vibrant cultural scene, Saguenay offers residents a high quality of life with lower housing costs compared to major urban centers. The city boasts a strong sense of community, excellent recreational opportunities, and a growing economy. For those looking to combine affordability with a rich cultural and natural environment, Saguenay stands out as an ideal choice.
Granby, QC
Granby, nestled in the heart of Quebec’s Eastern Townships, offers renters a delightful blend of small-town charm and ample opportunities. Known for its beautiful parks, vibrant cultural scene, and family-friendly environment, Granby provides an exceptional quality of life. The city’s affordable housing market and strong sense of community make it an attractive option for those seeking a peaceful yet dynamic place to live. With its renowned zoo, bustling downtown, and numerous outdoor activities, Granby is a hidden gem that caters to a diverse range of lifestyles.
Fredericton, NB
Fredericton, the capital city of New Brunswick, offers renters a harmonious blend of historical charm and modern amenities. Known for its vibrant arts scene, beautiful riverfront, and welcoming community, Fredericton provides an excellent quality of life. The city boasts affordable housing options, scenic parks, and a strong educational presence with institutions like the University of New Brunswick. Its rich cultural heritage, coupled with a thriving local economy, makes Fredericton an attractive destination for those seeking a balanced and fulfilling lifestyle.
Saint John, NB
Saint John, New Brunswick’s largest city, is a coastal gem known for its stunning waterfront and rich heritage. Nestled on the Bay of Fundy, it offers renters an affordable cost of living with a unique blend of historic architecture and modern conveniences. The city’s vibrant uptown area is bustling with shops, restaurants, and cultural attractions, while its scenic parks and outdoor spaces provide ample opportunities for recreation. Saint John’s strong sense of community and economic growth make it an inviting place for those looking to enjoy both urban and natural beauty.
Saint-Hyacinthe, QC
Saint-Hyacinthe, located in the Montérégie region of Quebec, is a vibrant city known for its strong agricultural roots and innovative spirit. Often referred to as the “Agricultural Technopolis,” it is home to numerous research centers and educational institutions. Renters in Saint-Hyacinthe benefit from a high quality of life with access to excellent local amenities, including parks, cultural events, and a thriving local food scene. The city’s affordable housing and close-knit community atmosphere make it an attractive option for those seeking a balanced and enriching lifestyle.
Lévis, QC
Lévis, located on the southern shore of the St. Lawrence River across from Quebec City, offers a unique blend of historical charm and modern conveniences. Known for its picturesque views and well-preserved heritage sites, Lévis is a city where history meets contemporary living. Residents enjoy a high quality of life with excellent public services, green spaces, and cultural activities. The city’s affordable housing options and strong sense of community make it a desirable place for renters looking for both tranquility and easy access to urban amenities.
This category looked at factors such as average rent, housing costs, rental availability, and unemployment rates. Québec stood out with 10 cities ranking at the top, demonstrating strong economic stability and affordable housing options, which are critical for renters looking for cost-effective living conditions.
Québec again led the pack in this category, with five cities in the top 10. Ontario followed closely with three cities. British Columbia excelled in walkability, with four cities achieving the highest walk scores, while Caledon topped the list for its extensive green spaces. These factors contribute significantly to the overall quality of life, making these cities attractive for renters.
Victoria, BC, emerged as the leader in this category due to its rich array of restaurants, museums, and educational institutions, offering a vibrant community life. St. John’s, NL, and Vancouver, BC, also ranked highly. Québec City, QC, and Lévis, QC, scored the highest in life satisfaction, reflecting a strong sense of community and well-being. Additionally, Saskatoon, SK, and Oshawa, ON, were noted for having residents with lower stress levels.
For a comprehensive view of the rankings and detailed interactive visuals, you can visit the full study by Point2Homes.
While no city can provide a perfect living experience for every renter, the cities highlighted in this study come remarkably close by excelling in key areas such as housing affordability, quality of life, and community engagement. These findings offer valuable insights for renters seeking the best places to live in Canada in 2024.
