China’s real estate sector sees robust sales, need more financing

Real estate developers in China registered robust sales this year and showed strong demand for financing in the fourth quarter.

A report of China Securities Journal on Tuesday revealed that housing sales in China enjoyed a boom from January to November, amounting to 4.48 trillion yuan (649.3 billion U.S. dollars), up by 33.2 percent from a year earlier.

During this period, three leading real estate developers, China Vanke Co., Ltd., Country Garden Holdings Co., Ltd. and China Evergrande Group, all achieved sales that touched or exceeded 500 billion yuan (72.45 billion U.S. dollars).

In November, about 30 developers signed contracts worth 425.43 billion yuan (61.64 billion U.S. dollars).

Amid these rosy figures, the demand for financing was also on a surge in China’s real estate sector.

For the past month, more than a dozen real estate developers in China had unveiled financing plans that aimed to raise a total of over 100 billion yuan (14.5 billion U.S. dollars), according to a report of Economic Information Daily on Tuesday.

In November, 52.3 billion yuan (7.58 billion U.S. dollars) of corporate bonds were issued at home, up by 14 percent from October and 112 percent from a year earlier. Such debts offered to overseas lenders stood at 30.4 billion yuan (4.41 billion U.S. dollars) for the same month, up by 263 percent versus the previous month and seven percent on a year-on-year basis.

In the first 11 months, corporate bonds issued by China’s real estate companies totaled 563.2 billion yuan (81.64 billion U.S. dollars) at home, a year-on-year increase of 66 percent, and 322 billion yuan (46.68 billion U.S. dollars) abroad, up by 12 percent from the same period in 2017.

Financing is expected to remain a priority for China’s real estate sector for the fourth quarter of 2018.

China’s 2018 housing sales may reach a new record high but also show signs of slowing growth. As scaled-based competition continues, real estate companies will have more urgent demand for financing, said Zhang Dawei, chief analyst of Centaline Property Agency Limited.