Chinese real estate developer Evergrande has disclosed losses of $81 billion over 2021 and 2022, underscoring how its massive debts remain a serious concern for the financial health of the Chinese property sector — and the world’s second-largest economy overall.
Real eState
China’s Evergrande reports $81 billion in losses amid real estate woes
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China’s post-pandemic recovery is threatened by the sluggish real estate sector, which is still responsible for a quarter of the economy’s growth.
As one of China’s largest builders of apartments, Evergrande slid rapidly into financial distress in late 2021, causing alarm around the world as some analysts feared a collapse that could be China’s “Lehman moment” — and the start of another financial crisis.
Instead off letting the company implode under a $300 billion pile of debt, Chinese authorities opted for what analysts called a “controlled demolition” — essentially managing the corporation through a gradual collapse. Since then, the company has continued to limp on, posing a continual headache for the policymakers who are trying to restore confidence in the real estate sector.
The group finally came clean about the extent of its near-fatal cash crunch and the slow progress it has made toward resolving its financial difficulties when it released a repeatedly delayed earnings report late on Monday local time.
Aside from the $81 billion in losses, Evergrande’s total liabilities continued to grow in 2022, reaching $335 billion compared with just $251 billion in assets, according to the earnings statement.
That disclosure underscored the Chinese government’s tricky effort to tackle real estate debt without bursting a possible property bubble, as it tries to ensure a tepid post-pandemic recovery doesn’t get knocked off track by a worsening real estate slump.
The Chinese economy missed expectations to grow by 6.3 percent year over year in the second quarter, according to data released on Monday. That slower than expected recovery is in part caused by falling property investment, which was down 20.6 percent in June, according to Reuters.
Lingering uncertainty over Evergrande’s fate reflects the poor state of the sector — and threatens to worsen it, analysts warn.
“Evergrande’s insolvency, beyond its own liquidity coming to a standstill, is also related to the cooling of housing sales” and the increased pressure for indebted property developers to finish projects, Xie Yifeng, president of the China Urban Real Estate Research Institute, told state-run Beijing Business Today. “It’s a vicious cycle.”
The continued insolvency means that “simple debt restructuring may be unable to save Evergrande,” Chen Xin, a finance professor at Shanghai Jiao Tong University, wrote on Weibo, China’s answer to Twitter. The situation is “tantamount to disaster” for the company’s creditors, Chen added.
Surging demand for homes and government reliance on land sales for income meant that developers like Evergrande had easy access to bank loans and could aggressively expand using a borrow-to-build model throughout the 1990s and 2000s.
But the government soon became wary of ballooning debt that might cause defaults, and regulators severely limited borrowing in 2020. Evergrande was left on the verge of collapse, in a crisis that many saw as marking the end for China’s housing boom.
Reduced access to loans has left property developers struggling to finish apartments, hurting buyer confidence and dragging down sales. Floor area bought in June fell by 28 percent compared with the same period a year before, official data released on Monday showed.
That slump extends a dilemma for Chinese policymakers, who are torn between stimulus measures to revive confidence and determination to defuse financial risks that could ultimately do more damage to the economy.
So far, however, Evergrande has neither collapsed nor significantly improved its financial situation.
Most of the $81 billion net losses disclosed on Monday was accumulated in 2021, resulting in a crisis and promises to restructure at the end of that year. But even last year, it still reported nearly $15 billion in net losses, underscoring how the company has struggled to substantially resolve its insolvency problems.
In another sign of the group’s uncertain financial future, Evergrande’s external auditor, Prism, said it could not comment on the financial statements because it was unable to obtain sufficient evidence regarding the group’s ability to meet its obligations.
Hong Kong-traded shares in Evergrande have been suspended since March 2022, meaning the company is just two months away from being delisted from the stock exchange.
Evergrande also said on Monday that it will meet with its overseas creditors this month to try to reach a deal on debt restructuring.




News
Housing and Accommodation Challenges Experienced by Canada’s Black Population


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Every human is entitled to housing and accommodation as part of their fundamental human rights and needs. While some residents of Canada enjoy this, the black community is socially exempted.
Canada’s Black population is currently experiencing discrimination from homeowners and landlords who prevent them from renting a home. Some blatantly refuse individuals with darker skin tones, while others raise the terms needed to rent the place, making it almost impossible for the average black person to sign an agreement.
According to a study by the Ontario Human Rights Commission, landlords often refuse people of African descent because some believe they are criminals or have too many children. These stereotypes harm the black population, preventing them from getting crucial accommodations for themselves and their family.
The situation becomes more tedious for immigrants as their post-arrival experience is riddled with fear, isolation, and anxiety. These individuals face discrimination from Landlords during the renting process as they encounter harassment and refusal for nothing more than their skin colour.
Factors like culture, economics, and language barriers also reinforce these feelings of inferiority in African immigrants, and many are yet to adjust to Canada’s language or ways of operation.
Housing is also scarce in Canada due to extremely low vacancy rates, insufficient social accommodation, and rent-geared-to-income housing. Therefore, getting a place to stay becomes more tricky for immigrants since the low vacancy rate results in higher rent fees.
Unfortunately, limited data that describes the racial background of renters makes it challenging to demonstrate and quantify the extent of discrimination that renters of colour experience in housing.
The absence of this race-based data hinders the efforts of advocates from these communities to bring about changes in housing policies and practices to address discrimination.
Nevertheless, the limited data available from the University of Toronto indicates that there has been an increase in household income levels since the 1970s. Unfortunately, individuals living in low-income neighbourhoods still earn incomes that are below the average.
Even in neighbourhoods where income levels rise, there tends to be a decrease in the percentage of immigrants residing there. Consequently, the likelihood of residents in these neighbourhoods being people of colour also decreases significantly due to their economic state and discrimination.
While Canada’s black population and dark-skinned immigrants can challenge unfair housing requirements and racism due to Canada’s housing rights and the country’s anti-discrimination policies, many do not.
One reason is the hassle associated with filing a complaint and going through the necessary processes before emerging victorious. By that time, money and time have been spent, which isn’t something someone with limited time to find housing desires.
Another reason many African Canadians don’t challenge unfair housing requirements because some are unaware of Canada’s housing rights. Others don’t have the connection to community advocates to help find better housing in their desired neighbourhood.
Ultimately, the deliberate rejection of people of colour from acquiring housing in Canada is an act of pure racism and discrimination developed by unhealthy stereotypes of the black community. Such situations push these desperate individuals to low-income areas since Landlords raise the already high housing cost beyond the financial capacity of black renters.
Such acts of racism require additional efforts from the Canadian Government to implement a system to report discrimination regarding housing with quick resolution. Further action is needed to reform landlords to service people of colour according to the standard for Landlords, irrespective of what stereotypes they believe.
Real eState
Why Mark Wahlberg and the ‘CSI’ Creator Are Buying Into Vegas’ Luxury Real Estate Boom – Hollywood Reporter
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Real eState
Average price of three-bed semi passes €300,000 – REA – RTE.ie
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