Bargain-priced Chinese property projects will be up for grabs in coming months as developers scramble to survive falling home sales and a financing crunch.
But foreign funds hoping to take advantage of the industry’s troubles can no longer expect a big fire sale.
The Chinese government has intelligently eased the tough measures it to cool the market at the end of last year.
When Beijing upped the ante in a fight against property speculation last year by ruling that buyers of second homes must make down payments of 40% on those properties, apartment sales and prices slid in the southern cities of Guangzhou and Shenzhen.
Some fund managers believed their time had come, and cheap deals would give them access to a Chinese property market where a yearly influx of eight million people into cities means long-term potential for profit.
Chris Gradel, managing partner at Pacific Alliance, which manages about $4.5 billion in alternative-asset funds targeted at China and Vietnam said, ‘We expected there to be a lot more guys going under and a lot more forced-sale situations.’
It did not happen. Gradel described the resilience of Chinese developers as ‘one of the biggest surprises of the year.’