China property bubble could cost banks $600 billion in bad debts
By Lianting Tu
China watchers are starting to put a price tag on what any collapse in the nation’s red-hot property market could cost banks.
A drop of 30 per cent in housing prices could cause 4 per cent of total bank loans worth 4.1 trillion yuan ($615 billion) to sour, according to DBS Vickers Hong Kong Ltd. Commerzbank AG said such a drop could trigger 4 trillion yuan in delinquencies. Pacific Investment Management Co. expects the non-performing loan ratio to peak at 6 per cent in the next few years from the current 1.75 per cent, amid risks from the property sector.
Seems like India and China suffer teh same pangs as far as Real estate is concerned. There are a huge number of houses available for possession or with Investors, at expensive prices, but no Real users for the same !!
16 hours ago
Many thanks to Sri Raghuram Rajan who prevented this happen in India. Our banks still have to be careful this doesn”t happen in other sectors. Hh
Manik Chandra Roy
18 hours ago
No! Housing prices in China is not going to crash in near future, say in 10 years or so! Last year stock market of China crashed. People has started putting money in property as an alternative investment to stock market.
18 hours ago
according to a recent report on Al Jazeera China has vacant buildings including dhost cities enough to accommodate a population of 100 million peopleC P Moraes
19 hours ago
heartening! when it will happen in realty?