New year, old problems for Chinese developers as debt crunch keeps bond investors wary

The new year is likely to offer little respite for troubled Chinese property developers amid lingering concerns about debt maturity, with market leaders like China Vanke and Country Garden Holdings facing repayment and restructuring deadlines.

More than 700 billion yuan (US$5.1 billion) of property bonds are due for repayment in 2025, versus 770 billion yuan that matured in 2024, according to China Academy Index.

The pressure will be felt early, with 160 billion yuan in each of the first two quarters, before rising to 190 billion yuan in the September quarter, according to estimates by Everbright Securities. Some 126 billion yuan matured in the final three months of 2024, including onshore and offshore obligations.

“Property developers’ pressure to repay debts remains huge [in 2025], given that many of them are still in the process of bond extensions or restructuring,” said Wang Xingping, a senior analyst at rating company Fitch Bohua. “Home sales proceeds and external financing [remain] constrained.”

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Boom, bust and borrow: Has China’s housing market tanked?

Boom, bust and borrow: Has China’s housing market tanked?

China’s property sector, once an economic pillar, slumped into a crisis soon after Beijing introduced the “three red lines” policy in August 2020 to control excessive leverage among weak home builders. It instead spun into a liquidity crunch, triggering an unprecedented US$160 billion of bond defaults.

Home sales fell 20 per cent to 7.49 trillion yuan in the January to November period from a year earlier, according to government data. Investment in the real estate sector dropped by 10.4 per cent to 9.36 trillion yuan.