Fitch: China Homebuilders' Restructuring Boosts Competition; Mitigates Oversupply

Mon May 12, 2014 9:00pm EDT

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(The following statement was released by the rating agency) Link to Fitch Ratings' Report: China Homebuilding Restructuring - Short-Term Risk Conducive for Long-Term Health here HONG KONG/SINGAPORE, May 12 (Fitch) Fitch Ratings says ongoing restructuring among Chinese homebuilders since early 2014 will continue to force uncompetitive developers out of the market and help to mitigate oversupply risk in the long term. China's property sector has experienced weak sales and negative sentiment, along with tighter onshore funding and polarization among cities. This restructuring process has led to the separation of stronger developers from weaker rivals. Given that nationwide housing demand is still strong and rated developers only account for around 33% of market share, there is still room to grow for stronger rated developers after restructuring and consolidation. In its latest report, Fitch examines the major factors behind the recent negative performance of homebuilders and the sustainability of China's property market in the long -term through the analysis of nationwide fundamental supply and demand data on housing. This follows Fitch's earlier report, '2014 Outlook: China Homebuilding', in which the agency addressed the risk of polarization among China's cities. Contacts: Andy Chang Associate Director +852 2263 9914 Fitch (Hong Kong) Limited 28th Floor, Two Lippo Centre 89 Queensway, Hong Kong Su Aik Lim Director +65 6796 7233 Kalai Pillay Senior Director +65 6796 7221 Media Relations: Leslie Tan, Singapore, Tel: +65 67 96 7234, Email: leslie.tan@fitchratings.com; Wai-Lun Wan, Hong Kong, Tel: +852 2263 9935, Email: wailun.wan@fitchratings.com. Additional information is available at www.fitchratings.com. ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: here. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

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