(Yicai) Feb. 14 -- Private developers in China raised 60 percent more through bond sales last month compared with a year earlier, even as overall debt issuance in the real estate sector fell, with the financing conditions for builders, particularly non-state-owned firms, expected to improve further.

Four private and mixed-ownership developers raised CNY3.9 billion (USD535.2 million) by issuing debt in January, according to China Index Academy data. They were Greentown China Holdings, Hangzhou Binjiang Real Estate Group, Midea Real Estate Holding, and New Hope Group. Meanwhile, the sector’s total new bond financing dropped 11 percent to nearly CNY51 billion (USD7 billion).

Developers, especially private companies, will continue to face debt repayment pressures this year, as CNY525.7 billion (USD72.1 billion) will come due by December, according to the China Real Estate Information Corporation Research Center. The third quarter will be the toughest period, when 30 percent of the debt matures.

Still, the financing situation is expected to improve thanks to the introduction of policies aimed at bolstering the market. For example, cities in Guangdong province, including Foshan, Huizhou, Jiangmen, Zhongshan, and Zhuhai, recently unveiled their first batch of special bond-funded land plots for sale. Incomplete CIA statistics show that as of Feb. 11 these cities planned to buy up over 160 idle plots for more than CNY35 billion.

“The special bond program for acquiring idle land helps optimize supply-demand dynamics and prompt a new cycle in the real estate market," Liu Shui, director of enterprise research at the CIA, told Yicai. This initiative could become a key focus of central and local government policies, with supporting measures expected to benefit more developers and non-state-owned players in particular, he added.

This year, policies are expected to focus on two key strategies: continuing purchases of existing housing stocks for affordable housing programs, and using local special bonds and the central bank’s special relending facility to buy unused land from builders. These measures are intended to steady inventory expectations by limiting the supply of new commercial housing in the short term and attract more low-cost capital into the market.

Editor: Futura Costaglione