China's property market is rebounding from the coronavirus crisis, but some warn it may overheat

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Housing sales in the country plummeted at the outset of the pandemic as China's economy shut down. But official data pointed to a recovery in transactions as the country reopened.

On Thursday, Blackrock's Head of Asian Credit Neeraj Seth also said he was "positive" on high-yield bonds in Chinese real estate.

High-yield bonds, or what are commonly known as junk bonds, are non-investment grade debt securities that carry a high default risk, and therefore, usually come with higher interest rates to compensate for that risk. Such instruments carry a credit rating of BB+ or lower by Fitch and Standard and Poor's, or Ba1 or below by Moody's.

But last year China experienced a slew of corporate bond defaults, raising concerns about the risks in its high-yield bond market.Analysts also warn that there could be a property bubble as the market continues to recover. Japanese bank Nomura, too, warned of a "potential property bubble" in a Thursday note. It cited rising property price inflation across 70 Chinese cities, inching up 0.6% month-on-month in June, up from 0.5% in May. The number of cities experiencing "sequentially higher" prices also rose from 57 to 61, it said.

 

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It may overheat as there are more restrictions from the CCP regarding the movement of money. Stashing money into properties is popular when banks won't do. Wear a mask. Vote. Care for all. =

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