The agency estimates that the impact of the support measures promoted by the Chinese Government will be “ephemeral” and will have “unequal” effects between cities of different sizes.
The financial rating agency Moody’s on Thursday lowered the outlook for the Chinese real estate sector from “stable” to “negative”, predicting that sales will continue to be affected by the economic slowdown and uncertainty about the stability of builders.
We expect sales to fall by about 5% nationally over the next six to 12 months,” Moody’s said in a report.
The agency estimates that the impact of the support measures promoted by the Chinese Government will be “ephemeral” and will have “unequal” effects between cities of different sizes.
Moody’s predicts declining sales based on a “declining volume as buyer concerns persist“, given the recent financial problems of the country’s largest construction company, Country Garden.
Between June and July, Property sales fell 20% year-on-year.reversing the 11.9% increase registered in the first five months of the year, the agency said.
Moody’s also predicts that, over the next year, credit ratings between public and private builders will become even more decoupled, as both buyers and investors seek to avoid doubts. “because your problems are unlikely to be completely resolved”.
The lack of market confidence will also mean that private construction companies will continue to have problems accessing financingsays the report.
One of the main factors behind the slowdown of the Chinese economy is the crisis in the real estate sectorwhich represents around 30% of GDP (gross domestic product), according to different analysts.
Many companies in the sector began to experience liquidity problems in 2021, following the limitations imposed by Beijing on their ability to finance themselves through leverage. The resulting distrust among potential buyers has led to a worrying slowdown in the market, as housing It is one of the main investment vehicles for Chinese families.
Source: Observadora
