Caixin
Jan 11, 2022 08:22 PM
BUSINESS

Tighter Controls on Spending Pre-Sales Revenue Set to Worsen Developer Cash Crunch, Analysts Say

Residential buildings under construction in Hohhot, North China's Inner Mongolia autonomous region,in December 2021. Photo: Liu Wenhua/China News Service, VCG
Residential buildings under construction in Hohhot, North China's Inner Mongolia autonomous region,in December 2021. Photo: Liu Wenhua/China News Service, VCG

The worst could be yet to come for China’s property market as regional governments tighten oversight on misuse of developers’ trillions of yuan in pre-sales revenue, piling up liquidity pressure on the industry, analysts and market insiders said.

Despite some recent easing of financing policies for the real estate industry, the continuing struggles of developers to pay their bills are likely to lead to a slowdown in the property market, dragging on the broader economic recovery in 2022, analysts warned.

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