Bond Financing Rebounds Sharply
China's property developers raised a total of 3,158.8 billion yuan in bond financing during the first half of 2026, representing a year-on-year increase of 21.7% — the highest growth rate recorded since 2022, according to the China Index Academy's H1 2026 bond monitoring report published on July 29. The rebound reflects improved market confidence following policy support measures, though analysts caution that the recovery is built on a low base and remains fragile.
Financing Structure Deepens
| Bond Type | H1 2026 Volume | YoY Change | Share |
|---|---|---|---|
| Credit bonds | 1,766.1 billion yuan | +11.8% | 55.9% |
| Offshore bonds | 171.7 billion yuan | +199.4% | 5.4% |
| ABS | 1,221.0 billion yuan | +27.5% | 38.7% |
| Total | 3,158.8 billion yuan | +21.7% | 100% |
Credit bonds remained the dominant financing channel, accounting for 55.9% of total bond issuance. Notably, state-owned enterprises (SOEs) — particularly local government financing vehicles (LGFVs) — drove much of the credit bond growth, as private developers continued to face tight financing conditions. Offshore bonds, while still a small share of total financing at 5.4%, posted extraordinary growth of 199.4% year-on-year, reflecting a partial reopening of the offshore USD bond market to select developers with credible restructuring plans.
REITs Milestone and ABS Growth
Asset-backed securities (ABS) financing grew 27.5% to 1,221.0 billion yuan, with approximately 80% backed by underlying assets such as commercial properties, supported by CMBS/CMBN and quasi-REITs structures. A landmark development in H1 2026 was the successful listing of China's first batch of commercial real estate investment trusts (REITs), marking the formal launch of a multi-tier commercial property capital market and providing developers with a new exit vehicle for income-generating assets.
Risks and Caveats
Despite the headline growth, the structural picture remains challenging. Developer financing needs are being driven primarily by debt rollover rather than new investment, as real estate development continues to contract. The sustained decline in developer到位资金 (funds received) since 2022 signals that the broader financing environment has not yet materially improved for smaller private developers. The ABS segment's growing share reflects a shift toward asset-backed, ring-fenced financing — a trend that is likely to accelerate as developers seek to separate good assets from legacy liabilities.