Borrowing by Chinese property developers dropped 70% year-on-year in January, underscoring the sector’s struggles with raising funds despite recent regulatory easing, reports Caixin. Developers’ fundraising through all channels totaled RMB 79.2 billion ($12.4 billion) in January, a 16.6% decline from December. Property companies raised RMB 266.5 billion in January 2021 and RMB 224.7 billion in January 2020.
January was the 11th consecutive month of shrinking borrowing by the real estate sector, highlighting investors’ persisting caution. Chinese developers have struggled with a liquidity crisis and slumping sales since the second half of last year as some large private players were mired in debt crises amid a regulatory clampdown on their financing.
Reduced financing is adding to pressures developers are facing with nearly RMB 1 trillion of repayment obligations this year. Developers’ monthly maturity of bonds will exceed RMB 100 billion in January, March, April and July.