China's Property Developers May Face Cashflow Drain: Expert

China's property developers are likely to suffer extremely strained cashflow if sales are not good in September and October as 40% of their loans will reach maturity by the end of 2010, argued an unnamed official with a state-owned bank. Property loans given to big developers and those operating in the second and third tier cities have become increasingly difficult to ovtain since the central government introduced policies in mid April to check asset bubbles in the largest cities. This has made funding costs rise 20%-30% and rendered the listed firms' increasingly leveraged to a range of 60%-70%, according to the official. The 112 listed property developers had a total ¥783.6 billion ($1 = ¥6.8) in liabilities as of June 30, 2010.