(Yicai) Nov. 8 -- Large Chinese real estate firms leveraged the least amount of funds in October since 2020, as many private developers, especially those who have defaulted, find it increasingly hard to raise cash, according to the latest data.

Fundraising by eighty representative developers plunged 41.5 percent last month from the month before and 51.9 percent from a year ago to CNY21.4 billion (USD2.9 billion), according to data released by think tank China Real Estate Information Corp on Nov. 6

And they issued only CNY5 billion (USD687.2 million) worth of bonds in October, a dive of 37.3 percent from September and 81.4 percent from a year ago, the report said.

Private developers' sales have been tumbling at a faster rate than the industry average and some of them have defaulted, market research firm China Index Academy said. As a result, investors and financial institutions are reluctant to lend to them.

China’s real estate sector has still not bottomed out even though property financing has been eased since the fourth quarter last year, CRIC said.

Regulators are releasing positive signals about real estate financing again, and last month stated that macro-prudential financial oversight of the property sector shall be tailored to meet the reasonable financing needs of all property firms, regardless of their ownership types.

But many market observers are uncertain if the regulator's statement will have much of an effect in alleviating the difficulties faced by most private developers in raising funds, especially those who have defaulted.

Developers that have defaulted are still having trouble negotiating with creditors to roll over their onshore debt, Yicai learned from industry insiders. For some developers, the vote to extend the deadline on their onshore debt has been pushed back multiple times.

The only way to help these firms raise funds is to formulate detailed measures that are enforceable and are in line with the interests of financial institutions such as banks, China Index Academy said.

Private developers who have defaulted before have nothing left to pledge and their reputation has been harmed, said Zhang Hongwei, founder of consultancy Jingjian.

On a practical level, future financing policies need to address how to help defaulters raise funds on the open market and how to meet the reasonable financing needs of different types of developers to ensure the timely hand over of presold projects still under construction and the smooth handling of debt restructuring, he added.

Editors: Xu Wei, Kim Taylor