Faced with a credit squeeze by Beijing, which is trying to curb the rising property market, more mainland developers will raise capital in Hong Kong through stock flotations, according to Richard Ho of Deloitte, the accounting firm. 'At least 10 to 12 mainland companies are either studying the possibility or are in the process of seeking a listing in Hong Kong,' said Ho yesterday as his company announced the latest edition of its China Real Estate Investment Handbook 2011. 'Some are our clients,' he added. The handbook said mainland developers needed proper funding plans, alternative funding sources and flexible strategies to handle the challenges posed by the uncertainty of government policies. 'Bank financing in China seems to be impossible,' said Ho. Developers have been looking at different fund-raising channels, such as bonds, he said. For the second time this year, one-year deposit and lending rates were raised by 25 basis points last month. The benchmark one-year deposit rate rose to 3.25 per cent and the five-year and above lending rate was 6.8 per cent. Bank lending to the property industry on the mainland was 195.4 billion yuan (HK$233.4 billion) in March. But that was only 28 per cent of developers' total source of funds during the month, the lowest level since 2011, according to property consultant DTZ. National development loans shrank to 115.8 billion yuan in March, down 13.6 per cent from the January to February average, DTZ said. Ho said finding funds through stock flotations was also an option for developers. 'We will see mainland developers seeking listings in Hong Kong in the fourth quarter of this year or in the first quarter of next year,' he said. Because of the combined effect of the central government's austerity measures and tightened liquidity, new home sales dived in the first quarter. Sales fell an average 25 per cent, while home prices rose 0.4 per cent last month from March, according to Soufun Holdings, the nation's largest real estate website owner. The slowdown in the property market also led Midland Realty to close all but one branch in Shanghai. But Ho said there was no obvious sign of a price correction in the mainland market, despite the government's cooling measures. Nancy Marsh, capital providers leader of Deloitte China, said new tax rules had been released on the mainland and property developers should study the recent developments in tax law and the regulations. She said the State Administration of Taxation had issued circulars which clarified settlement and collection of land value appreciation tax. 'Mounting pressure for the government to control property prices and readjust its housing policy will prompt more tax changes, including the potential introduction of property tax in China on a nationwide basis,' Marsh said.