Research On The Risk Factors And Early-Warning Of Real Estate Enterprises’ Bond Default Under Strict Supervision

The "Houses are for Living in,not for Speculation" as the fundamental policy for real estate industry was first proposed at the end of 2016 by Chinese government.In order to execute such fundamental policy,government departments and local governments have enacted a series of regulation and rules on the real estate industry’s financing,land and sales which are becoming more and more stricter.In 2020,with the impact of the coronavirus pandemic weakened,the regulations for real estate industry including Three Red Lines policy and Bank’s Loan Concentration were worked out.The supervisions for real estate enterprises on financing return to normal and became more stricter.The first bond default in real estate industry occurred in 2018.Until the end of March 2021,thirteen real estate enterprise occurred bond defaults.It seems to state the tendency in real estate industry that the quantity of enterprise occurring bond default and default amount are gradually increase.The overall credit risk of the real estate sector needs to be reassessed.This paper makes a systematic analysis on thirteen real estate enterprises having occurred bond defaults from the aspects of strategic,operation,investment and merger,and financial leverage,and further concludes that bond defaults of real estate enterprises are characterized by the high financial leverage,low inventory turnover and aggressive expansion.As for the bond default warning of real estate enterprises,this paper mainly focus on three aspect including the Z-score model,real estate enterprises’s debt paying ability and credit rating.The paper draws the following conclusions:Firstly,the effect of Z-score model to be used in early warning of real estate enterprises’ bond default risk is poor;However,the Z-score model can partly reflect the overall credit risk of the real estate industry,and the downward trend of Z value can partly indicate the default risk of the real estate industry becomes larger.Secondly,two-thirds of the sample enterprises touch the one or more indicators of the "three red lines".The real estate industry’s credit capacity is poor,and with the implementation of strict supervision,the real estate industry’s bond default risk will increase;Thirdly,the credit rating takes part effect on early warning the real estate enterprises’ bond default,but limitedAt the same time,this paper puts forward the suggestions from the view of the real estate enterprise,supervisions for real estate enterprises and credit rating in order to prevent and control the financial risks in the real estate industry.