#AceFinanceNews – CHINA – April 03 – Many of China’s Estate Developers are verging on the Brink of bankruptcy, as many borrowed heavily at high interest rates. The fact that borrowing at the time was plentiful the risk was a lot greater and now they many estates remain empty.
Though interest payments remain high and still require servicing.
Government Official Analysis has shown that the following indicators apply to this situation.
- Some of the second and third tier cities housing prices under pressure, as still remaining empty.
Analysts expect more regional small developers will go bankrupt, as the city dwellers are reticent given the present worldwide situation.
The fact that prices still remain high will lead to the decline in building projects as more banks that are risk avert, tighten criteria of their lending.
The real outcome in the long run will be that over priced estates, will remain vacant. Whilst cash-strapped developers still have to either go bankrupt or are forced into liquidation by the banks.
Ace News Services 2014