May 21 Moody's on Wednesday lowered its outlook
for China's property industry to negative from stable,
reflecting expectations of slower residential property sales
growth, high inventory levels and weakening liquidity over the
next 12 months.
"The weaker sales growth for the sector is driven mainly by
tighter onshore liquidity, increased mortgage rates, buyers'
expectation of further easing of property prices and slower GDP
growth in China," Moody's said.
Yet, the agency said it expects the credit quality of most
of the developers that it rates to remain stable due to their
good liquidity and access to funding. Favorable operating
conditions in 2013 boosted the liquidity of many rated
developers, it said.
After increasing at double-digit rates through most of last
year, home prices in China started cooling in late 2013 as a
sustained campaign to clamp down on speculative investment and
easy credit gained traction.
An abrupt correction would pose risks to the banking system
and the economy.
China's central bank has asked commercial banks to speed up
the granting of home loans and to set mortgage rates at
reasonable levels, sources told Reuters last week.
(Reporting by Ian Chua; Editing by Kim Coghill)