Profit-making abilities of China's property developers deteriorated in the third quarter, as financial reports of 58 domestically listed property firms show their average net profit margin slid to 7.5 percent.
According to a report released by Centaline Property, the total revenue of the 58 listed property companies reached 377.83 billion yuan in the third quarter, over a total net profit of 28.21 billion yuan, or an average net profit margin of around 7.5 percent. Of these 58 companies, net profit margins of 21 were above 10 percent, and those of 37 were below 10 percent.
The report said that real estate in China had become an industry of medium-low profit. The average net profit margin of property companies slid to 9.1 percent in the first half of this year, below 10 percent for the first time, compared with 10 percent in 2014 and 11.97 percent in 2013.
Zhang Dawei, chief analyst of Centaline Property, predicted that the net profit margin of property companies would reduce to 8 percent for the entire 2015, and those less competitive developers would transfer to other industries.