In March this year, total borrowings of the 95 main real estate developers in China from financial institutions amounted to RMB 119.558 billion ($17.0 billion), up 42.7 percent month on month, but down 14.5 percent year on year, as announced by CRIC, a real estate research institute of E-House, a Shanghai-based real estate transaction service provider.
Due to the outbreak of the coronavirus, real estate industry sales in the first quarter were severely hit, while total borrowings of the overall real estate industry from financial institutions in the quarter reached RMB 390.3 billion ($55.3 billion), almost remaining stable compared to the same period last year.
The first quarter of a year is regarded as the key period for real estate developers to obtain financing. In 2020, China’s central government continues to emphasize that housing is for residential rather than speculative purposes, though there has been some speeding up of approvals of bank loans for the sector.
Mainstream real estate developers in China think that their financing costs this year will likely decrease by between one and two percentage points compared to the previous year as China has issued policies to increase liquidity.
$1 = RMB 7.0536