LaSalle’s October 2021 Macro Indicators

Housing Market Meets Policy Headwind: Recent Lessons from
Evergrande


The story of China’s Evergrande Group, one of the country’s
largest and highly-leveraged developers, continues to develop by
the day. As of early October, we see a low probability of
systematic risk in the global financial system due to
Evergrande’s financial troubles.  The company’s debt
problems are likely to be carefully managed by Chinese
authorities and have a limited effect on the Chinese financial
system and the real estate market.  The spillover effect has
been limited so far.  According to our analysis of the
Chinese corporate bond market, there is no evidence of
broad-based financial stress in China real estate and other
industries.  With that said, we expect capital market
volatility to increase in the near term.