If Evergrande Sneezes… Will Australia Catch A Cold?

October 06, 2021

Paul Miron – Managing Director:

Evergrande, one of the world’s largest property developers/builders operating in the 2nd largest economy in the world (China), is the most indebted company globally, with approximately $416billion (AUD) in debt. It is presently defaulting on its loan repayments and is on the verge of collapse. It operates within China’s most critical and most significant sector being property and construction, an industry which contributes between 25% to 29% of their national GDP. The significance of these events is not just related to one company; they have the potential to have far-reaching consequences globally.

As we attempt to peel off layers of this incredibly significant event, we believe it certainly has the potential to be a catalyst of a deep and enduring crisis that might take years to resolve and will impact Australians’ wealth portfolios.

To understand how this will impact Australian investors, we will explore the Chinese property market, history, drivers and compare them to the Australian property market fundamentals.