A Research On The Diversification Of Financing Channels In China Real Estate Enterprises

The healthy development of real estate industry plays a very important role in national economy, especially in the fields of steel, building materials, household appliances, and other related industry. As we all know, fund is the blood of enterprises, let alone real estate enterprises which is capital intensive. For the present, the financing channel of real estate enterprises in China is still simple. The real estate enterprises demand large amount of money to invest in projects, but most of them choose to rely on the system of commercial banks, which makes the banking system undertake the management and market risk of the whole real estate industry. Meanwhile this also leads to instability in the macro economy. If the government takes some measures to control and shrink the credit of the real estate industry, their capital chain will suffer a serious threat.Based on the literature of real estate financing, this article describe the development and characteristics of China’s real estate industry, and the basic principles of choosing financing channels in China’s real estate industry. Then the article analyses the present situation of the real estate enterprises financing channels in our country and the main seven modes. In the part of case study, we select Poly Real Estate Group co., LTD as the example to discuss its characteristics in the aspects of financing. The article tries to find a suitable financing mode of real estate in China, meeting the needs of financing and minimizing the weighted average cost of capital of the enterprises. In this way, we can help to maximize the enterprise value and promote the healthy development of real estate enterprises in our country.