Daily Economic News published an article that discussed the impact of the yuan’s depreciation on the housing market. Continued depreciation of the yuan will increase the cost real estate developers have to pay in order to obtain overseas financing. They may be forced to reduce housing prices to ease their financial difficulties.
According to the article, depreciation will increase the cost of corporate finance overseas. Considering the small amount of such overseas financing, the impact may be limited. However, the depreciation will push real estate developers to return to the Chinese domestic market for financing. For money-hungry real estate developers, if the devaluation continues, it will definitely increase the cost of overall financing abroad. When such costs increase by over five percent, the downstream housing market will be affected.
Source: Daily Economic News, August 12, 2015