Chinese real estate firms have turned to the overseas market to seek financing as tougher regulations have made it more difficult for them to raise funds at home.
At least five property companies have announced moves to issue notes or bonds, worth more than 2 billion U.S. dollars in total, in the overseas market since the beginning of July, according to latest statistics from Centaline Property Research Center.
They include Greentown China and Longfor Properties, both major property developers in the country.
Greentown China said earlier this week it would issue 450 million dollars of senior perpetual capital securities, with the net proceeds to be used to refinance existing debt and for general working capital purposes.
Longfor Properties said early this month it would issue 450 million dollars of senior notes due in 2020 and use the proceeds for refinancing only.
The moves came as domestic financing by real estate developers shrank, following tightened market regulation aimed at curbing asset bubbles and preventing financial risks.
Property firms raised 177.2 billion yuan (26.1 billion dollars) through bond and note issuance in the first half of 2017, a 74-percent plunge year on year, according to Centaline Property.
"Authorities have strengthened control over various sources of funding for developers," said Le Jiadong, analyst at GF Securities. "Major financing channels have been narrowed across the board."
Meanwhile, the cooling housing market means less contribution from home sales to the companies' cash flow. Property sales had surged over two years of pro-growth policies before Chinese authorities moved to contain speculation in the second half of last year.
Local governments have since raised down payments, increased mortgage rates and restricted purchases. Of 70 large- and medium-sized cities surveyed in May, new home prices fell or rose more slowly month on month in 35 of them, up from 31 in April,according to the National Bureau of Statistics.
An indication of weaker sales, real estate loans accounted for 35 percent of all new loans extended by Chinese banks in the first half, down from 44.9 percent in 2016, central bank data showed.
The financial stress on Chinese developers is already high. New interest-bearing debt borrowed by 107 listed property firms in the 2015-2016 period reached 852 billion yuan, more than the total for the previous five years, according to financial information provider Wind Info.
"In the coming six to nine months, fund shortage could become a more and more serious problem for real estate companies," said Centaline Property analyst Zhang Dawei.
In this changing landscape, bigger players are expected to gain market advantage over smaller rivals as they usually have deeper pockets.
Lower financial costs will become an essential part of property companies' competitive strength in the future, said Feng Lun, head of the China Real-Estate Crowdfunding Alliance.