China's Real Estate Crisis Causes Asia's Richest Woman To Lose Half Her Wealth

Yang Huiyan, Asia's wealthiest woman, saw her fortune shrink by more than half this year, from nearly $24 billion to $11 billion, as China's property crisis worsened, according to the Bloomberg Billionaires Index. Country Garden Holdings, China's largest real estate developer by sales, is led by the 41-year-old. Her father, Yang Guoqiang, founded the company in Foshan, Guangdong province, in 1992, and transferred a large portion of her stake to her.

As the nation's real estate industry has faced declining property prices, waning buyer demand, and a debt default crisis that has enveloped some of its top developers since last year, Country Garden's stock has lost more than half of its value this year. According to the Bloomberg Billionaires Index, Yang is still the wealthiest woman in Asia despite losing more than half of her money. Due to the sharp decline in her net worth, Yang is now only about $100 million behind Fan Hongwei in terms of fortune, who is a fellow female billionaire in China. Fan is a producer of chemical fibres and chairs Hengli Petrochemical.

Yang Huiyan Asia

Following months of financial problems, Evergrande, China's most indebted real estate company, missed payments on its US dollar bonds in December. Since then, a number of other significant developers have also requested protection from creditors, including Kaisa and Shimao Group. The housing problem has gotten worse recently as thousands of irate homeowners who put down payments on incomplete houses threatened to quit making mortgage payments if construction wasn't finished on schedule, as per reports.

According to reports, a developing cash crisis is also affecting Country Garden. The developer stated on Wednesday that it would sell shares at a nearly 13% discount to the closing price on Tuesday in order to generate HK$2.83 billion ($361 million). The company's offshore debt will be partially repaid with some of the earnings, it was reported. According to a report released on Wednesday by Capital Economics experts, the mortgage boycotts pose a dual danger to the housing market and developers.

Suggested Reading: Small Entrepreneurs Are Making Digital Changes to Business Models

They have brought up the issue of cash-strapped developers failing to finish properties that they have previously sold, which is deterring potential homebuyers. Banks are now being more selective when giving mortgages as a result of the boycotts, which might further dampen real estate sales, they warned. According to analysts at Capital Economics, the lack of sales will cause many more developers to fail, posing a risk to both the economy and the financial system of China.