(Yicai Global) April 14 -- Against the backdrop of ongoing policy support, the amount of funds Chinese property developers raised from non-bank financial institutions doubled last month from February, new figures showed.

Total non-bank financing of real estate companies surged 109 percent to CNY91.8 billion (USD13.4 billion) in March from the previous month, but fell 16.3 percent from a year earlier, according to data from the China Index Academy.

Credit bond financing climbed 15.9 percent from a year ago and 101 percent on the prior month to CNY66.8 billion, the data showed. In the first quarter, the figure rose 11.6 percent to CNY129.7 billion (USD18.9 billion) from the same month last year in the first annual increase for many quarters.

Trust and asset-backed security financing jumped 36 percent and 273 percent to CNY4.1 billion (USD600 million) and CNY21 billion, respectively, in March from February. But both figures fell in the three months ended March 31 from the previous quarter, down 73 percent and 42 percent.

China’s real estate market is recovering thanks to the implementation of supportive government policies such as a new pilot program initiated in February to boost private investment in the sector and help developers cut debts and leverage ratios, replenish liquidity, and put idle assets to better use.

Since last November, when the authorities issued a document asking financial institutions to support the sector, more than 30 listed builders have unveiled equity financing plans, 10 of which completed them in the first quarter.

Trust and ABS financing softened last month because investors are still worried about risks in the property sector and are monitoring the recovery in sales, said Liu Shui, director of corporate research at the China Index Academy.

Meanwhile, the channel financing costs of property developers fell in March, the comprehensive financing interest rate dropped by about 0.5 percentage point both from a year and a month earlier, with the average interest rate on credit bonds falling to 3.74 percent, the CIA’s data showed.

Loans and bond financing still mostly flow to state-owned enterprises with good standing. It is still uncertain whether private developers can further break down the financing barriers.

The market is still paying close attention to the arrival of the peak debt repayment period for builders. According to the CIA’s numbers, CNY666.7 billion (USD97.4 billion) of bonds mature this year, accounting for 23.5 percent of the total bond balance. Of that, CNY97.5 billion falls due this month, 51.9 percent of which is overseas debt.

Considering that property sales by developers with maturing debt will remain low in the short term, debt extension will be the mainstream choice for most of them, said Tang Xiaolin, an analyst at Golden Credit Rating. But rollovers may bring difficulties related to external financing so equity financing may be their only option, Tang added.

Editors: Tang Shihua, Futura Costaglione