Chatter about effects of slowing Chinese property sales

Author: Adam Button | Category: News

You don’t have to look hard to find talk about the Chinese property bubble bursting. When it pops, the property developers will be the first to feel the squeeze. S&P is out with a report on developers.

  • S&P says they expect property sales to rise 25-30% in 2011.
  • Do not see a material decline in China property sales
  • Weakening sales and tight credit could cause a liquidity problem with developers
  • Most developers could absorb a 10% sales decline in property sales next year
  • Many companies would struggle if sales fell 30%
  • Credit is getting tighter for developers

It’s 2012 where the pain could hit and with sales rising so fast, problems are inevitable in a slowdown and something greater than 10% is not a stretch.

It’s China, so it’s always tough to separate the rumors from the truth but either way, this promises to be a major theme in 2012.

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