[photopress:property_Chinese_apartments.jpg,full,alignright]The headline comes from the International Herald Tribune which is not normally given to gloomy stories.
It reports that although official figures show investment in property rose 32% in the first four months from a year earlier, developers are worried as bank loans dry up and the cost of tapping other sources of funds rises.
Falling home sales are a particular threat to developers, who typically rely heavily on cash from the sale of unfinished projects to pay for operations and expand.
According to the China Index Academy, which is affiliated with SouFun.com, a leading real estate Web site, the number of residential transactions in Beijing fell 13.7% in April from March and was down 56.4% from a year earlier.
Not a happy scene.
Zhang Xinming, chairman of Walter Asia, a developer based in Jiangxi Province, said maximizing cash flow was now his main strategy.
Walter Asia has accelerated the development of land that it had bought cheaply, hoping to cash in quickly.
It is also shifting its focus from high-end housing preferred by investors to more affordable apartments that are still in demand by regular home buyers. Which is what the government wanted to happen.
Zhang Xinming said, ‘The ability of Chinese developers to get through the harsh winter is growing.’
Source: International Herald Tribune