Chatter about effects of slowing Chinese property sales
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.