China Developers: Hard Pressed, Not Yet Distressed

From Reuters:

Bargain Chinese property projects will be up for grabs in coming months as developers scramble to survive falling home sales and a funding crunch.

But circling foreign funds can no longer expect a big firesale as the government eases its tough steps to cool the market, fearing mass bankruptcies and a property price slide that would send a shiver through the economy.

When Beijing upped the ante in a fight against property speculation at the end of last year by ruling that buyers of second homes must pay 40 percent in equity, apartment sales and prices slid in the southern cities of Guangzhou and Shenzhen.

Developers, already squeezed by a land appreciation tax and a clampdown on bank lending, then found that capital market turmoil closed off share and debt issuance.

September 8, 2008 6:16 PM
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Categories: Economy