I have two questions and maybe someone here is chinese and expert!
First, what is the interest rate for a construction loan in China, does anybody know more exactly? (Apartment loans for private persons is around 8% I heard and add 2 or 3% more for companies, it should be around 11%)
Secondly, there are lots of restrictions when it comes to bank lending in the real estate sector, does it also apply to real estate developers or is it just for private lending?
The 20-F filed in April 2012 lists XIN's Chinese loans. They range from 6% to 8%. Some of the restrictions are listed also.
No loans for land.
Typically a construction loan is for 65% of the land value....which gives the loans very low risk.
I believe development companies must put up at least 35% of a project's capital from their own equity.
So it means they use the bond issue for the 35% which the banks do not cover? I guess it could be quite difficult to lend more than 65% of the value when government want to cool of the real estate market.