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Property developers start to feel the pinch

By Cai Muyuan (chinadaily.com.cn)
Updated: 2010-05-06 17:13

Ever since the central government announced tough property measures, markets in China's first-tier cities have slowed. Developers who made good money last year started to feel the pinch, time-weekly.com reported.　

According to annual reports, 86 developers made a net profit of 34.71 billion yuan ($4.47 billion) in total last year. Of those, 19 saw more than 100 percent growth year-on-year.

The annual reports of ten big property developers, led by China Vanke and Poly Real Estate Group , showed the total amount of cash held at the end of last year was 121.7 billion yuan, while the total debt of the ten developers was 420 billion yuan, the website reported.

Chen Limin, director of Taiping Shengshi Investment Co, said the property market will rebound if the policies are temporary. If they're long-term measures, the market will be gloomy and housing prices will go down.

According to Song Huiyong, a real-estate analyst with the Centaline Group, both developers and buyers have a wait-and-see attitude. The price of second-hand properties will loosen before the first-hand properties. In the third quarter this year the market is expected become less stable and prices might fall.