Bonds of China's Largest Property Developer Crash

Please consider Another Big Chinese Property Domino Is Wobbling.

Shares and bonds of property giant Country Garden Holdings dollar-denominated bonds maturing in January 2024 are trading at 25% of their notional value, compared with 81% as recently as mid-June.

Contracted sales at the country's top 100 developers plunged 33% from a year earlier in July, according to China Real Estate Information.

Beijing's latest moves to support the sector—including making it easier to buy an apartment—don't seem likely to help much. The fact that even the biggest developers can still run into trouble, nearly two years after Evergrande's struggles first reached a fever pitch, presumably gives potential home buyers little confidence.

Speculative demand for housing—in the form of second and third, often unrented homes—supported the market for years, helping paper over China's weak demographics. But the protracted downturn and the government's hands-off approach appear to have seriously undermined the assumption that housing prices will keep going up endlessly, over the long run.