Property bond defaults soar 159pc

The cumulative amount of defaulted bonds by property developers reached 46.75 billion yuan (HK$56.46 billion) in 2021 by September 27, a 159 percent rise compared with last year, data from CRIC shows.

The total fundraising amount of 100 mainland developers in the first three quarters of this year was 1.09 trillion, down 21 percent year on year as the liquidity problem affected their ability to issue bonds, it said.

The housing rental business can be a new growth engine for China's property developers, an opinion column in state media said.

The default risks of Chinese developers also worried foreign investors.

Chinese debt saw the largest outflows in six months in September on volatility triggered by the China Evergrande Group crisis, but high debt issuance across emerging markets helped push overall foreign inflows to their highest levels since June.

Emerging market securities pulled in US$29.8 billion (HK$233.44 billion) from foreign accounts last month, said data from the Institute of International Finance, which also showed the largest outflow from Chinese debt since March.

Debt securities accounted for a net US$26.2 billion flow into emerging markets last month as US$34.3 billion made its way to destinations outside China, while Chinese debt posted an US$8.1 billion outflow.

"The high level of EM hard currency sovereign bond issuance during September (about US$24 billion) helped to lift the overall performance for flows," Jonathan Fortun, an IIF economist, said in a note.