Developers Worry After China’s Booming Residential Market Falters

Beijing–The hot Chinese real estate market appears to be cooling off because of widespread credit issues, sinking prices and less transactions, the International Herald Tribune reported Tuesday.Property investment increased 32 percent in the first four months of 2008 in China–but a reduced amount of bank loans and increased borrowing costs have some building industry members concerned.Developers–who depend on cash from the sale of unfinished projects–are worried that declining home sales will hurt their ability to fund day-to-day operations and growth. Bank regulators and analysts fear a wave of defaulting property loans will surface.In Beijing, the number of residential transactions dropped 13.7 percent from March to April, according to the China Index Academy. Transactions were down 56.4 percent compared to the same period in 2007.China’s property outlook index–which measures market conditions–has been declining since November.