The bonds of some private developers such as Country Garden and CIFI Holdings"Developers that are either state-owned, or investment-grade rated, or those that are owned by or associated with local financial institutions will be the ones that are able to borrow long-term, cheap financing," said Jenny Zeng, chief investment officer for Asia fixed income at Allianz Global Investors.
Meanwhile investors have taken a dim view of the private sector. Short interest in Asian real estate - mostly private Chinese property firms - has been rising since April, with shares loaned as a proportion of market capitalisation hitting 0.75% in July, showed data from S&P Global Market Intelligence.
Lower debt and better financing have helped state-owned enterprises gain market share. They have historically generated around one-third of property sales but that share has risen in recent years to about 59%, Capital Economics estimates. The top five developers by sales in the first half year were state-backed, showed data from China Real Estate Information Corp. Long-time leader Country Garden was sixth.