Moody’s changes tune on Chinese property, raises sector’s creditworthiness for first time in about 2 years
- Home sales are expected to report flat growth in the next 12 months after a gradual recovery in sales volume from a 28 per cent drop last year, rating agency says in report
- Homebuyers’ income growth and consumer confidence expected to gradually improve, which will increase their willingness to spend on property
Home sales are expected to report flat growth in the next 12 months after a gradual recovery in sales volume from a 28 per cent drop last year, thanks to China’s economic recovery and favourable government policies stimulating home demand, the international rating agency said.
The robust sales growth of as much as 6 per cent year on year in the first quarter will, however, not continue and the recovery will be uneven, the Moody’s report said.
“We expect homebuyers’ income growth and consumer confidence to gradually improve amid China’s economic recovery, which will increase their willingness to spend on property,” the report said, adding that some favourable measures by the government – ranging from relaxing home purchase restrictions to cutting mortgage rates – will support sales.
Home sales in China pulled back last month after rapid growth in February and March. The volume of new home transactions in 30 cities tracked by Chinese property information platform CRIC fell 27 per cent month on month in April to 16.42 million square metres which was much lower than pre-pandemic levels. The sales were dragged down mainly by lower tier cities, which saw a decline in sentiment last month.