Mainland developers are aiming low in their contracted sales this year despite supportive government policies as they struggle to survive narrowing profit margins. Many developers failed to achieve the robust targets they set last year, after a market correction started in February, dragging the country's economic growth to a 24-year low. Their strategy of aggressive debt-driven expansion no longer finds favour as investors are now more concerned about their cash flow, debt ratio, profit margins and risk exposure to Beijing's anti-corruption crackdown. "We have been preparing for the hard days that are coming in the property market to help the company survive," said Shao Mingxiao, the chief executive of medium-sized developer Longfor Properties. Shao's caution contrasts increasing government efforts to rev up housing demand through a slew of measures, including cuts in interest rates and transaction taxes. More measures are expected in coming months as the property market is a major driver of the economy. "Due to the country's high debt [to GDP] ratio, the room for supporting the property market through a monetary policy relaxation is now limited," Shao said. "The property market has been accumulating risks in the past three years," as local governments quickened the pace of land sales to help repay trillions of yuan of debt, adding to the housing glut. Longfor is expecting a 10 per cent growth in contracted sales this year after missing last year's target of 20 per cent. That, it believes, will give it room for further restructuring efforts it started in 2012, cutting land reserves and construction while speeding up inventory sales. Another developer, Guangzhou R&F Properties, was so badly hit by the market downturn that it decided against paying any dividend, the first time since listing nine years ago. Sales fell short of target, even after a downward revision. Developers have now come around to the view that home prices will not increase forever and have begun in earnest to try to clear their inventories. They are also trying to overcome the margin compression they have been facing of late and tackle the evolution of the industry, particularly in sales, marketing and funding brought about by the internet. Almost all developers have been trying to tap diverse channels to lower funding costs and extend debt maturity, while streamlining management and production. Beijing-based Sino-Ocean Land Holdings said it would prioritise selling non-strategic assets, control costs and manage cash flow. It sold 17 billion yuan (HK$21.3 billion) of 28 billion yuan of inventories last year and exited from three third-tier cities - Fushun in Liaoning province, Zhenjiang in Jiangsu, and Qinhuangdao in Hebei. Like most of its rivals, Sino-Ocean will only replenish land reserves in first and second-tier cities, which are expected to emerge from the downturn first, probably even with a slight price rise in the second half of this year. "The market hasn't warmed up yet despite a lot of positive news," chairman and chief executive Li Ming said. Meanwhile, Poly Real Estate Group, the country's No 5 developer by sales, announced this week it would cut new construction by 15.3 per cent this year. General manager Zhu Mingxin said destocking would be the common challenge for developers in the next two years. The process would be painful and the results uncertain, Longfor chairman Wu Yajun said. "If you make a turn after seeing an iceberg, you will hit it," Wu said. "You have to turn around the moment you feel [there is an iceberg ahead]."