Chinese private developers face a RMB 4 trillion ($553 billion) funding gap to complete pre-sold homes, adding to the woes of an industry that has yet to bottom out, according to a research report by Goldman Sachs Group Inc, reports Bloomberg. Credit support from banks—which totaled RMB 469 billion as of the end of March—“appears well below the amount needed for securing home completions,” analysts led by Lisheng Wang wrote in a report released Sunday.
As China’s real estate crisis continues, the impact of property easing measures from last year are fading in the new homes market, according to the report. Many metrics tracking the industry continue to worsen, and developers’ funding conditions remain stretched. Plus, compared with previous major housing cycles, the magnitude of policy actions “appears small,” the analysts added.
“The housing sector has not yet reached the bottom of the L-shaped path we expect,” they wrote.