China Evergrande Says Construction Has | Stock Market News Today

Troubled property developer

China Evergrande Group

EGRNF -10.55%

said construction work has resumed at more than 90% of its stalled residential projects, adding that it has picked up the pace of delivering apartments promised to home buyers across the country.


EGRNF -10.55%

in a statement Sunday night, said more than 80% of its suppliers of materials and decorative services have “resumed cooperation,” and that it has signed thousands of new contracts with various suppliers. At the end of August, the developer disclosed that construction had been suspended at some projects after it fell behind on payments. And by October, hundreds of Evergrande’s unfinished developments were affected by work stoppages.

With just a few days to go before the end of 2021, Evergrande said it intends to deliver 39,000 homes in 115 projects to buyers across China in December. It compared that to its completion of fewer than 10,000 units in each of the preceding three months.

The world’s most indebted real-estate firm Evergrande has embarked on a social media campaign to show construction has resumed and says it’s doing whatever it takes to deliver homes. WSJ compares these posts with ones from upset buyers. Photo Composite: Emily Siu

In a post on social media Monday, Evergrande said apartment projects have been handed over in batches in 18 provinces and it released photos of completed buildings adorned with bright red decorations and people signing papers to take ownership of their homes.

Despite this, Evergrande still has many more commitments to fulfill and its debt crisis remains unresolved. The 25-year-old developer used to be one of the country’s largest by contracted sales and is on the hook to deliver units to more than one million people. Many buyers made large down payments on unfinished flats, expecting to take ownership of them in a few years.

Hui Ka Yan,

Evergrande’s founder and chairman, said that “under the care and guidance of governments at all levels,” as well as support from partners, financial institutions and other constituents, the developer has made progress in its commitments to homeowners.

He added that Evergrande would do whatever it takes to resume work and deliver homes and predicted that the firm will eventually be able to “resume sales, resume operations, and pay off debts.”

Hui Ka Yan, China Evergrande’s chairman, in Hong Kong in 2019.


Paul Yeung/Bloomberg News

The company’s statement followed comments over the weekend from two Chinese regulators which said they would safeguard the rights of homeowners and keep the property sector stable. Beijing has been trying to prevent Evergrande’s debt crisis from hurting the many small businesses and ordinary citizens that the developer owes money and apartments to.

Wang Menghui,

head of China’s Ministry of Housing and Urban-Rural Development, said in an interview with the state-run Xinhua News Agency that the regulator will address the risks of some leading developers that fail to deliver projects on time, with the goal of “guaranteeing home deliveries, protecting people’s livelihoods and maintaining social stability.”

The People’s Bank of China separately said—as part of a wide-ranging statement on the economy—that it would protect the rights and interests of homeowners and promote the healthy development of the country’s real-estate market.

Evergrande, the world’s most indebted developer, has been struggling under the weight of roughly $300 billion in liabilities, including around $20 billion in international bonds. The developer has missed payment deadlines on some of its dollar bonds, setting the stage for a massive and complex restructuring. Major credit raters have declared it to be in default.

Earlier this month, the conglomerate sought help from the government of its home province, Guangdong. It has since set up a risk-management committee that includes representatives from several state-backed entities.

Evergrande recently said the committee is working to help contain its risks and will engage with its creditors. Some international bondholders, however, have said there has been little communication from the company so far, the Journal reported last week.

The company’s Hong Kong-listed shares have plunged in value this year to historic lows and its dollar bonds are trading at deeply distressed levels. Markets in Hong Kong were closed Monday for a public holiday.

Write to Anniek Bao at [email protected]

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Commodities Boom Hits Home – WSJ | Sidnaz Blog

Prices are surging for the raw materials used to build American homes.

Lumber, one of the biggest costs in home-building after land and labor, has never been more expensive and is more than twice the typical price for this time of year. Crude oil, a starting point for paint, drain pipe, roof shingles and flooring, has shot up more than 80% since October. Copper, which carries water and electricity throughout houses, costs about a third more than it did in the autumn.

Prices for granite, insulation, concrete blocks and common brick have all pushed to records in 2021, according to the Bureau of Labor Statistic’s producer-price index, which measures the change in prices that producers receive for their output. Drywall and ceramic tiles are short of records but have also climbed.

Materials producers like paintmaker

Sherwin-Williams Co.

SHW 0.01%

and flooring manufacturer

Mohawk Industries Inc.

MHK -2.90%

as well as builders

D.R. Horton Inc.

DHI -0.55%


Hovnanian Enterprises Inc.

HOV -0.66%

have been raising prices to pass along higher costs. They can thank historically low borrowing costs, federal stimulus payments and a hunt for yield that has sent investors barreling into the home-rental business.

“Whoever the home buyers are, they have been able to pay for it,” said

Todd Tomalak,

who tracks building products for John Burns Real Estate Consulting.

American Homes 4 Rent,

which built more than 1,600 rentals last year and plans to construct another 2,000 houses this year, said its lumber bill is between $20,000 and $25,000 per house, up from about $10,000.

The National Association of Home Builders says that current lumber prices are posing a heavy burden for home builders and contractors.


Charlotte Kesl for The Wall Street Journal

“Fortunately, we’ve been in a rental-rate growing environment, and that has kept us yield neutral,” said

Jack Corrigan,

the company’s chief investment officer.

Investors are watching all corners of the economy for signs of stimulus driving a pickup in inflation. They are finding it in housing, where rising input prices are translating into higher costs for consumer goods.

Federal Reserve policy makers say they haven’t seen enough of a jump in the price of goods and services to alter their course of holding interest rates near zero and pumping cash into the economy, which remains in recession and plagued by unemployment.

Rock-bottom mortgage rates have made owning a house more affordable, while the Fed’s purchasing of mortgage-backed securities has spurred lending. Lower household spending during the lockdown and federal stimulus checks have helped people accumulate down payments. House hunters are bidding up properties alongside legions of investors who are buying and building a growing share of America’s houses and renting them out.

The competition for houses has lifted home prices in almost every part of the country, enabling those who already owned to use their homes as cash machines. Americans pocketed $152.7 billion from cash-out refinancings last year and went on a remodeling bender.

Building supply chains weren’t prepared when Americans began swarming model homes and Home Depots in April. Sawmills and factories shut down like most other workplaces early in the lockdown. Oil wells were shut in, and refineries idled. A spate of hurricanes knocked out Gulf Coast facilities that produce polyvinyl chloride, or PVC, raising prices to records for the material used for waste pipes and siding, according to ICIS, which tracks chemical commodities.

Suppliers never caught up. Now building permits for residential construction are being issued at their highest rate since 2006. And the latest round of stimulus checks are landing in bank accounts just in time for spring, when Americans tend to house hunt and start remodeling projects.

CanWel Building Materials Group Ltd.

, which distributes building supplies in Canada and the western U.S., has enough orders for rot-resistant wood to keep its lumber-treating facilities running at capacity through 2021.

“We’re sold out. We can’t take on any more business this year,” Chief Executive

Amar Doman

told investors last week. “Everything that we’re producing is sold, and it’s out the door.”

Lumber and other wood products took off last summer and have remained aloft. Futures for delivery this month ran up to $1,040 per thousand board feet, nearly triple the typical price this time of year. The story is similar for oriented strand board, used for walls, floors and roofs. Many engineered wood products are in short supply and hard to find.


If you are remodeling or building a home, how have higher prices for materials affected your plans? Join the conversation below.

The National Association of Home Builders says that rising lumber prices have added $24,000 to the cost of building the average single-family home and about $9,000 per apartment. The lobbying group last week asked Commerce Secretary

Gina Raimondo

to seek immediate remedies to boost production.

“Current prices represent an intolerable and frequently insurmountable financial burden to home builders and contractors,” the group said.

Executives with D.R. Horton, the country’s largest home builder, said they are paying more for lumber as well as shingles and facing short supplies of windows and appliances.

“We are increasing our prices in general, but we balance our moves in prices relative to affordability and what we think our buyers can actually afford in terms of the monthly payments,” finance chief

Bill Wheat


Builders boosted prices for nearly three quarters of all floor plans offered during January, according to RBC Capital Markets, compared with 54% of models that became more expensive in December.

Federal Reserve Chairman Jerome Powell tells WSJ’s Nick Timiraos there is no plan to raise interest rates until labor-market conditions are consistent with maximum employment and inflation is sustainably at 2%. Photo: Eric Baradat/Agence France-Presse/Getty Images.

Some builders are finding limits to what customers will pay. In Raleigh, N.C., Brant Chesson, CEO of Homes by Dickerson, said that last month he lost six customers in one day after he raised prices to cover higher lumber bills.

“Even though there still is a great sales pace, we lose customers every day,” he said.

At Burke Brothers Hardware nearby, owner Jeff Hastings is balancing rising costs with keeping customers. He is stocking up on copper wire before prices go any higher and sacrificing his own profit on lumber sales to attract customers who will add higher-margin items, like fasteners and tools, to their tickets.

“We’re not going to gouge people this year just to make a profit,” he said.

Write to Ryan Dezember at [email protected]

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