BEIJING – Cash flows to Chinese property developers – a measure of the companies’ ability to stay afloat – have fallen this year after steady growth over the past decade, according to Oxford Economics.

According to an analysis by the organization’s chief economist, Tommy Wu, developer cash flow through July was down 24 percent year-on-year.

That’s the biggest slowdown in nearly every year since at least 2009, the data said. Total financing was 15.22 trillion yuan ($2.27 trillion) a year as of July, compared with 20.11 trillion yuan in 2021.

The decline comes as credit demand in China fell short of expectations in July and property developers struggled.

About two years ago, Beijing began to crack down on developers’ heavy reliance on debt for growth. Evergrande, in particular, ended its loss at the end of last year. Other developers like Shimao have defaulted despite seemingly healthy balance sheets.

While investors are wary of Chinese property companies, developers are now at risk of losing another important source of cash flow: homebuyer down payments.

Homes typically sell before completion in China. But since late June, some homebuyers have protested delays in apartment construction by stopping loan payments.

“The crux of the problem is that property developers don’t have enough cash flow — due to debt servicing costs, low home sales or misappropriation of funds — to proceed with projects,” Wu said in a report last week.

“Resolving this problem will rebuild homebuyers’ confidence in developers, which will help support home sales and, in turn, improve the financial health of developers.”

More than $2 billion of high-yielding property developer debt is due in September — more than twice as much as in August, according to an Aug. 10 analysis by Morgan Stanley.

About a quarter of homebuyers who buy their property before completion are willing to stop making loan payments if construction is halted, the U.S. investment bank said in an Aug. 15 report, citing an AlphaWise consumer survey by Owners.

Not only does real estate account for the majority of household wealth in China, but analysts estimate that real estate-related assets and industries account for more than a quarter of China’s gross domestic product. The real estate slump has contributed to a slowdown in overall economic growth this year.

To support growth, the People’s Bank of China cut rates on Monday, including an unexpected cut in the one-year interest rate on the medium-term lending facility.

While the PBOC expects the cuts to ease the burden on some homebuyers and help developers get loans, the problem is not just about financing, said Bruce Pang, head of research for Greater China at JLL.

He pointed out how developers are finding it difficult to get financing on their own and have to rely more on pre-sales for home buyers. But people are becoming more cautious about buying new homes because of future job expectations and returns on existing investment products, he said.

Despite several reports that the government is planning to keep developers funded, the central government has not officially announced any massive support for real estate. Last month’s top government meeting said Reading. Local governments are responsible for handing over completed houses.

Among the three main sources of developer funding, down payments and deposits have fallen the most this year, down 34%, according to Wu’s analysis.

Credit as a source of funding fell by 22 percent, while self-raised capital, including stocks and bonds, fell by 17 percent, the annual data showed.

Investment funds have moved away from Chinese property developers, reducing the source of funds.

A lack of willingness and speed from top policymakers to address real estate developer funding issues is a concern, Brandywine Global Assistant Portfolio Manager Carol Lee said in an emailed response to CNBC.

Lee said the investment management company’s allocation to Chinese real estate is low, and Brandywine said “high-quality real estate bonds are prioritized in terms of government support.”

Some investors have also turned to companies in other parts of Asia.

“We have exited all our holdings in China housing,” said Xin Yan Low, Singapore-based portfolio manager of Asian property equities at Janus Henderson. It’s more of a wait-and-see game,” he said. She declined to share a timeframe for those sales.

There are still many options in the region, especially now that they are reopening, Singapore, Australia, basically a full reopening, the fundamentals are strong.

Top holdings in Horizon Asia-Pacific Property Income Fund include Japan Metropolitan Fund Invest, Mapletree Logistics Trust and Hang Lung Properties.

Morningstar’s Patrick Gee said in a report this month that some money has shifted from Chinese assets to other high-yielding sectors in Asia, including Indian renewable energy companies and Indonesian assets.

Overall, the report said inflows into China’s property funds fell by 59% in six months.

But the report said investment giant BlackRock, including Shimao, was among the firms buying Chinese real estate bonds.

The asset manager did not respond to CNBC’s request for comment.

— CNBC’s Michael Bloom contributed to this report.