Chinese housing developers seek profits below the surface

With the volume of home sales continuing to fall amid strict measures aimed at tightening the property market and lowering house prices, some real estate companies are trying to dig their way out of the uncertainty by getting into mining.

By June, at least 15 property developers, buoyed by rising metal prices and significant potential returns, had tapped into the mining industry, with a total investment of 19.26 billion yuan ($2.98 billion), according to the China Mining Association (CMA).

Most of the investment went into mines producing gold, lead, zinc and molybdenum, according to the CMA.

The Change in developers' investment strategy came after it became harder for them to cash in on the housing market, which has been impacted by a series of government measures since last year aimed at cooling it.

The measures include requirements for larger down payments, interest rate rises, home purchase restrictions, price controls, third-home purchase bans and a real estate tax trial in the cities of Shanghai and Chongqing. 

Source: China Daily