In Past Two Months 10 Developers Face Credit Crisis or Bankruptcy

From early March to early May, there have been several cases of credit crunches or outright defaults by real estate developers, starting with Xingrun.

More followed:
Nanjing Developer Defaults as China Real Estate Credit Crunch Continues
China’s real estate industry witnessed its second significant default in less than a month last week when a Nanjing property developer failed to repay a RMB 105.4 million (US$16.9 million) inter-company debt from a Shenzhen-listed shipbuilder.

The default on a RMB 90 million loan, as well as another 15.4 million in interest, by Nanjing Fudi Property Developing Co was revealed on April 15th......

Housing projects in China in limbo due to debt-ridden developers
Earlier this month, seventeen house owners in Nanjing in eastern China's Jiangsu province recently threatened to jump off the top of an unfinished eight-story apartment building in protest against work stopping at the site.

The protesters took to the roof of the construction, holding placards reading "Ready to jump off building to safeguard rights." The new building was set for completion last year but work stopped in May.

The apartment building project was developed by local firm Yingjia Real Estate, which is reportedly on the verge of bankruptcy.

The latest crunch faces the Guang Group.

两月内十余房企被曝资金告急 破产危机波及大房企
since March this year, in Ningbo, Zhejiang, Jiangsu, Nanjing , Wuxi, Hefei, Anhui, Hubei Xiangyang, Shaanxi Shenmu nationwide and more, more than a dozen small room rate is a result of exposure funding strand breaks into a bankruptcy crisis, housing prices on small capital chain tight, or reproduce "foot boom" extremely hot discussions moment.

But not only small and medium housing prices, the strength of the former housing prices may also encounter similar funding difficulties. Recently, the glorious estate capital chain is blocked, the message can not be delivered on time its number of real estate, has been publicly confirmed aspects of the developer, for a time, this funding crisis hundred housing prices, touched in a "lost" state of the property market is more sensitive nerve. It is worth noting that, according to the "Securities Daily" reported that many of the early expansion of radical, high debt of the real estate business are facing tremendous financial pressure, and noted that the first opening is also one example.

Face tighter capital chain status quo of small and medium housing prices and housing prices successive outgoing strength, industry analysts said, the real estate market is in a new round of reshuffle, and was shuffling out of housing prices is not necessarily small.

Frequent emergency funding chain over housing prices could not escape the fate of bankruptcy

March 2014, the credit tightening, when the price surges spreading, Ningbo, Zhejiang Fenghua largest local real estate companies - Xing Sheen capital chain rupture, housing prices opened the prelude of the Horse "bankruptcy" of. It is reported that, because of chaotic management, land devaluation, resettlement housing project strategic mistakes, heavy private lending and other issues, Xing Yun Department of total liabilities amounted to 3.5 billion, has become China's first real estate company huge event of default.

Xing Yun crash, has been media commentary to "tear down the 2014 collapse of the small room rate first domino." Subsequently, the funding strand breaks, housing prices go bankrupt, unfinished projects, such as voice after another.

In early April, Nanjing was Innca estate owners rights report, saying funding strand breaks, the development of the family in the spring to stop the construction project; mid-April, the boss on foot Nanjing blessed news uproar, it's an overdue billion yuan in bank funds entrusted loan principal and interest will have to wait; April 18, Zhejiang Lide estate private lending due to non-multi-pen is more than creditors sued; May 6, several media reports said the glorious chain of real estate funds breaking the verge of collapse ...... According to incomplete statistics, since March, housing prices across the country has been discovered more than a dozen funds in an emergency, or even collapse, involving several provinces of Zhejiang, Jiangsu, Anhui, Hubei, Hainan, mostly concentrated in the four-tier cities, and many small and medium housing prices.

These cases, most of the market, than the recent crazy pass "glorious estate funds strand breaks" event. March 27, Guangyao Dutch town some owners to protect their rights, said its brilliance in Huizhou multiple project funding strand breaks lead to downtime, can not be delivered on schedule. Experienced more than a month transferred the verge of "bankruptcy" of public opinion fermentation, May 7 glorious estate public statement, acknowledged that the company faced a funding chain issues, but denied saying the brink of bankruptcy, also expressed willingness to accept after the acquisition of other companies.

In addition, according to the "Securities Daily" reported that by the end of 2013, the first open shares [ 0.69% funding research report ] also facing debt reached 183%, the annual interest expense over the net profit more than doubled, to get to the amount exceeding its sales and other capital chain tension. And analysis, said in a gradual tightening of bank lending in the current real estate development, housing fund under pressure is not uncommon.

Financial crisis spread to the ward or small and medium enterprises of housing prices may not be shuffling out

According to the National Housing Enterprise funds report shows that in the first quarter of this year, real estate funding sources increase from 26.5% last year plunged to 6.6%, industry analysts believe that 2014 financing housing prices are still narrow. Government to abolish the limit with the current rumors, property stocks rise, some developers price run, buyers are expected to quietly changing environment, such as the combination of the size of housing prices in the property market arena is facing a major reshuffle.

This in itself is weak liquidity of small and medium housing prices is undoubtedly a new challenge: the market traded in the doldrums, bank loans blocked, difficulties listed channels, which some experts predict that housing prices in the second half of small funds will be more frequent breaks occur. Shanghai Research Director Zhang Hongwei think with policy advice, and June 2014 will be a tough survival of small and medium housing prices, product type and migraine high turnover rate is slow, too radical to take place early lead to higher costs, less credit Good credit constrained SMEs, there will be more market risk.

Housing prices in the hundred glorious estate funds to implement tighter rumors, Guangzhou Han with real estate experts noted that this case may illustrate the funding crisis could spread from small fracture housing prices prior to ward rate. First open housing fund and other tight coverage and for this added a new illustration.

Rand Consulting president 宋延庆 BEIJING real estate channel in an interview to interview, also said: "China's real estate is facing a new round of reshuffle, but was shuffled out, the room is not necessarily small and medium enterprises, while there may be a medium-sized enterprises. exactly which companies were shuffling out, does not depend on size, but on their health status. "(BEIJING real estate channel)

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