The worst of China’s property crisis is over.

HSBC Chief Executive Noel Quinn has suggested that the worst of China’s property crisis is over and now expects the Chinese property market to stabilise. This outlook will be seen as a very important commentary on the situation within China. Mr Quinn stated that he thinks we are at the bottom of the market but it will take quite a while for markets to regain momentum.

HSBC has set aside US$500m to cover expected loan losses on commercial property in China.
The recent property sector support measures announced by the Beijing authorities have yet to translate into a meaningful rebound in property values although they are expected to do so, to the relief of investors and home owners. Credit conditions in China are not yet good for the property market but this ongoing weakness should also improve.

Mr Quinn’s assessment came at a time that the mega sized Chinese property developers Evergrande avoided liquidation. Evergrande has debts of US$300bn and is the poster boy of indebtedness in China’s debt ladened property sector.

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