FINANCING RISKS AND COUNTERMEASURES IN REAL ESTATE INDUSTRY

Abstract

Under the supply-side regulation of the “The Three Red Lines”, loan concentration management, pre-sale fund supervision and other policies, the asset-liability ratio and net debt ratio of China’s real estate enterprises continues to improve. However, at the same time, there is a contrast between leverage ratio decline and risk increase, indicating that there’s still serious capital problem in the real estate industry, and the existing high-cost financing risks, high-leverage operation risks, high-proportion indirect financing risks, and high-probability overseas financing default risks have not been properly addressed. In the long run, it is necessary to strengthen the structural and long-term regulation of financing in the real estate industry, clarify the differences in risk degree of real estate enterprises, improve the stable expectations of participants in the real estate industry, and fundamentally solve the problems of high-cost financing and high-leverage operations. In the short term, it’s necessary to increase the direct financial support of high-quality real estate enterprises, standardize the external debt financing of real estate enterprises, and resolve the high-cost financing risks, high-proportion indirect financing risks and overseas financing default risks.