The slump in the world’s biggest asset class has spread from the housing market to commercial real estate, threatening to unleash waves of credit turmoil across the economy. Almost $175 billion of real estate credit is already distressed, according to data compiled by Bloomberg — about four times more than the next biggest industry.
It followed a government crackdown on the industry in 2020 that sought to cut developers’ leverage, reduce home prices and lower the risk to the financial sector. Beijing has changed its approach in recent weeks and may allow property firms to add more debt as part of a softening of the authorities’ stance.
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