19.5 C
New York
Sunday, September 25, 2022

Latest Posts

Chinese developers, in “survival mode”, cut real estate investment

- Advertisement -

Chinese developers, in “survival mode”, slashed real estate investment in July, while new construction starts suffered their biggest drop in nearly a decade, suggesting the cash-strapped sector is not You can turn around in the short term.

- Advertisement -

The Chinese real estate market, which accounts for about a quarter of the economy, has been mired in a capital crisis since the summer of 2020, leading some cash-strapped developers to default on their debts and struggle to complete Projects. Buyers’ misgivings have also cooled new investments by developers.

Real estate investment in July fell 12.3% year-on-year, the biggest decline in 2022, while new construction starts by square footage plummeted 45.4%, the biggest drop since January-February 2013, according to Reuters calculations based on data from the Office for National Statistics (NBS) released on Monday.

Everyone except state-owned companies is in survival mode.” said a senior official at a Shenzhen-based promoter who asked to remain anonymous. “We are all waiting for a recovery and trying to speed up sales and reduce costs and buy less land. But in the end, sales depend on the end users”.

- Advertisement -

Cash-strapped developers have suffered from tight credit conditions since 2020, after regulators issued tough guidelines on new loans from developers concerned about spiraling debt.

We will have to tighten our belts, and our main priority is to make sure that housing projects are delivered”, told Reuters a member of a promoter who in his day failed to comply with a bond payment.

It’s really hard to get funding once your credibility is damaged”, he stated on condition of anonymity.

Loans made by domestic banks to developers in July fell 36.8%, while capital raised from abroad plummeted 200%, according to Reuters calculations from NBS data.

Source: Gestion

- Advertisement -
spot_imgspot_imgspot_img

Latest Posts

Don't Miss

Stay in touch

To be updated with all the latest news, offers and special announcements.