A man looks up at a residential building in Changsha in Hunan, May 13. (Photo/CNS)
The real estate market in China has continued to slump, with many medium and small-scale developers facing closure due to an inability to access funds, which has affected large realty firms.
Since March this year, over a dozen medium and small-sized developers in Ningbo, Nanjing, Wuxi, Hefei, Xiangyang and Shenmu have been faced with a bankruptcy crisis, with many nearly bankrupt firms likely to flee, according to the website of the state-run China News Service.
A total of 2.4 billion yuan (US$385 million) worth of non-performing loans were reported by 15 banks.
It will be a very difficult period for medium and small developers in May and June and it will be even harder for those with bad loans.
Even though small and medium developers anticipated the crisis first, it is the large developers that are more likely to be victims of the real estate bubble bursting.
For example Guang Group Real Estate, one of the largest developers in China, drew the market's attention recently as it was unable to complete construction of several projects because of difficulty in raising funds.
Guang admitted that it had a problem with its financial situation. Even though it is not facing bankruptcy, the company is willing to be acquired by other firms.
In addition, the secondhand housing market is lackluster and some real estate agencies have begun downsizing their businesses.
Century 21 Real Estate has recently closed three outlets in Beijing, indicating that the first and second-tier housing market is also being hurt by the downturn, the Shanghai-based National Business Daily reported.
The American realtor shut down over 20 stores across China between August 2012 and March 2014.
A real estate agent working in the capital city said that Century 21 had seen a declining market share over recent years, which had slipped from 5% to 1%.