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Chinese developer Fantasia can't pay its debts. That's stoking real estate fears – CNN

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Hong Kong (CNN Business)A Chinese developer of luxury apartments missed $315 million in payments to lenders on Monday, sparking fears that financial strains in the country’s outsized property sector are spreading beyond the troubled Evergrande conglomerate.

Fantasia Holdings, a Shenzhen-based developer, missed repaying $206 million worth of bonds that matured Monday, the company said in a stock exchange filing. It is now assessing “the potential impact on the financial condition and cash position of the group,” it added.
Separately, the property management unit of Country Garden, China’s second largest developer by sales after Evergrande, said in a filing that Fantasia had failed to repay a company loan of about 700 million yuan ($109 million). Fantasia had informed the company that it would probably “default on [its] external debts,” Country Garden Services added.
S&P and Moody’s slapped “default” credit ratings on Fantasia and said the non-payment of principal would likely also put the company in default on its remaining bonds.
“The downgrade follows Fantasia’s announcement … that it had missed payment on its $205.7 million bond due on the same day, and reflects our expectation of weak recovery prospects for Fantasia’s bondholders after its default,” said Celine Yang, a senior analyst at Moody’s.
Fantasia shares were suspended on Tuesday but shares of Country Garden Services tumbled 3.2% in Hong Kong. Country Garden Holdings lost 2.8%.

Defaults could hit growth

The news revived fears that debt woes are deepening in China’s overextended property sector, which accounted for 29% of outstanding loans issued by Chinese banks in yuan in the second quarter of 2021. The sector is vital to China’s economy — real estate and related industries account for around 30% of GDP.
“The [Chinese] property sector is worrisome,” wrote Larry Hu and Xinyu Ji, China economists for Macquarie Group, in a research note on Tuesday.
Fantasia’s default shows that Evergrande’s troubles “could dampen the sentiment for homebuyers, developers and banks, causing more developers to run into a liquidity crunch,” they said.
The outlook for the Chinese property market is not encouraging. Property sales in the top 30 Chinese cities plunged 31% in September from a year ago, according to Macquarie’s estimates.
Evergrande’s debt crisis has unsettled global investors in recent weeks, raising concerns about a potential domino effect on the broader Chinese economy and financial markets.
The company’s problems have been brewing for more than a year, after Beijing started reining in the real estate sector in August 2020 to curb excessive borrowing to prevent the market from overheating.
Earlier this year, the Chinese government made it clear that it would prioritize “common prosperity” in its policy goals and tame runaway home prices, which it has blamed for worsening income inequality and threatening economic and social stability.
Evergrande’s liquidity crisis has escalated in recent months. The company warned investors of its cash flow crisis in September, saying that it could default if it was unable to raise money quickly. In the past few weeks, it missed at least two bond interest payments.
“While Evergrande’s problems are unlikely to trigger a Lehman moment, they will aggravate the ongoing property sector slowdown,” said Louis Kuijs, head of Asia economics at Oxford Economics, in a report on Tuesday.
“Given the large overall footprint of the residential real estate sector via ‘backward linkages’ to sectors such as steel, its slowdown will weigh significantly on overall economic growth,” he said.
Nevertheless, Chinese policymakers appear to be standing firm. Last week, the People’s Bank of China and the banking regulator said that they would protect homebuyers. Their statement made no mention of developers.
— Anna Cooban contributed to this article.

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Real estate secrets; Family blindsided after others profit off obituary; CBC's Marketplace Cheat Sheet – CBC.ca

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Miss something this week? Don’t panic. CBC’s Marketplace rounds up the consumer and health news you need.

Want this in your inbox? Get the Marketplace newsletter every Friday.

Real estate agents caught on hidden camera breaking the law, steering buyers from low-commission homes

Marketplace’s latest investigation is uncovering some shady real estate practices.

Posing as homebuyers and sellers, Marketplace tested if real estate agents are engaging in steering, an anti-competitive practice that steers potential homebuyers away from properties that offer agents lower commission. The team’s hidden cameras found some agents deceiving the buyers they are supposed to represent in an effort to pad their own bottom line.

Experts and industry insiders say what Marketplace has uncovered is indicative of an industry working for the benefit of real estate agents at a cost to home sellers and buyers.

“There’s a huge inertia, and maintaining the status quo, it absolutely benefits existing realtors 100 per cent,” said broker and real estate agent Michael Walsh, one of the few speaking out on this issue.

After learning about our findings, the Real Estate Council of Ontario issued a notice about steering to more than 93,000 real estate agents, brokers and brokerages under its purview, noting that such behaviour breaches their code of ethics. Read more

Real Estate Secrets

2 days ago

Investigation catches real estate agents breaking the law to keep commissions high, hamper competition and block private sellers. 22:30

Family blindsided after marketing company, funeral home cash in on father’s obituary

Before pancreatic cancer took his life in April, John Rothwell made his dying wishes clear: if mourners wanted to donate to a cause in his name, the money should go to an educational fund he and his family set up.

Instead, family and friends unwittingly paid for a product that puts money into the pockets of companies profiting from grief, says son Nathan Rothwell

Rothwell told Go Public that while he knew the obituary would be on the website of the Mackey Funeral Home in Lindsay, Ont., he made sure it included a request for mourners to consider donating to the educational fund, in lieu of flowers. 

What no one told his family is that Frontrunner — a Kingston, Ont.-based marketing company that runs the funeral home’s website and many others across the country — uses obituaries to sell what it calls “memorial” trees and other products.

The obituary included links that said, “Plant a tree in the memory of John Rothwell” and led to a different website where mourners paid for products the family knew nothing about, said Rothwell. 

“Family and friends spent money out of their own pockets for what they thought were my dad’s wishes,” Rothwell said.

After Rothwell complained and got a lawyer involved, Frontrunner doubled what mourners paid for the trees, and donated that money — more than $2,000 — to the educational fund. The company maintains that it did nothing wrong. Read more

Nathan Rothwell says his dad wanted memorial donations to go to an educational fund. Instead, some money went to private companies using obituaries to sell memorial-themed tree plantings. (Robert Krbavac/CBC)

The U.S. land border is reopening, but Canadians with mixed vaccines are still in limbo

While it’s welcome news that the U.S. will reopen its shared land border with Canada to non-essential travel on Nov. 8, some Canadians with mixed vaccine doses aren’t celebrating just yet.

That’s because at the same time the U.S. reopens the land border, it will start requiring that foreign land and air travellers entering the country be fully vaccinated. 

The U.S. Centers for Disease Control (CDC) currently doesn’t recognize mixed COVID-19 vaccines — such as one dose of AstraZeneca and one dose of Pfizer or Moderna — and hasn’t yet said if travellers with two different doses will be blocked from entry when the vaccine requirement kicks in. 

“CDC will release additional guidance and information as the travel requirements are finalized later this month,” spokesperson Jade Fulce said in an email on Wednesday. Read more

A U.S. Customs and Border Protection agent directs vehicles re-entering the United States from Canada at the Ambassador Bridge in Detroit on Aug. 9. Starting in early November, Canadians entering the U.S. by land and air will have to be fully vaccinated, but there’s uncertainty over whether two doses of different vaccines will count. (Matthew Hatcher/Getty Images)

What else is going on?

What we know about kids and COVID-19 vaccines
If parents feel heard and understood, they’re in a much better position to make decisions, say pediatricians

Zellers returns — kind of — but the lowest price isn’t quite the law 
Discount store brand reappears months after HBC appears to lose trademark registration.

Sweatpants forever? Why the ‘athleisure’ fashion trend may outlast the pandemic
The pandemic has changed fashion trends — and experts say our desire for comfort is here to stay.

Canada seeks to claw back $25M in COVID relief from thousands of fishers 
More than half of the harvesters affected by the repayment request are in Nova Scotia.

Specialized Tarmac SL7 Bicycles recalled due to fall hazard
Consumers should immediately stop using the bicycles and contact an authorized Specialized retailer.

Marketplace needs your help

Have you ever signed up for a session with a life coach? We want to hear all about your experience! Email us at marketplace@cbc.ca.  

Watch this week’s episode of Marketplace and catch up on past episodes any time on CBC Gem.

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This Week’s Top Stories: Canadian Real Estate Tops The List of Global Bubbles, and IMF Warns of Correction Risks – Better Dwelling

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This Week’s Top Stories: Canadian Real Estate Tops The List of Global Bubbles, and IMF Warns of Correction Risks  Better Dwelling



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Real estate secrets – CBC.ca

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Canada has among the highest real estate commission rates in the world.

Our investigation found real estate agents breaking the law by steering buyers from low-commission homes. Hidden cameras caught them in the act.

Watch our full investigation anytime on CBC Gem.

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