China's property sales decline to slow in 4Q - Moody's

    Moody's Investors Service said it expects contracted sales for China's (Aa3 stable) property sector in 4Q to improve from the previous quarters following various supportive policies announced at end-September 2014.
  "The year-over-year decline in total contracted sales for China's residential property market will slow to 5%-10% for the full year 2014 compared with the drop of 10.8% recorded for the first nine months of 2014," said Kaven Tsang, a Moody's Vice President and Senior Analyst. 
  Tsang was speaking on the release of Moody's latest monthly China Property Focus.
  The slower decline in full-year sales reflects Moody's expectation that sales volumes will increase slightly in 4Q owing to (1) a moderate improvement in the availability of mortgages and mortgage terms for first-time homebuyers and for second-time buyers who have fully repaid their first mortgage; and (2) the removal or relaxation of restrictions
on home purchases in the majority of cities.
  On 30 September 2014, the People's Bank of China announced a set of measures that ease mortgage lending conditions for homebuyers in China. This is the first relaxation of mortgage lending rules by the central bank since property sales began slowing in January 2014.
  "The new measures are credit positive for China's property sector because they will increase mortgage availability and lower the cost of mortgages for borrowers who meet certain criteria, which will alleviate pressure on property sales," Tsang added.
  Among Moody's rated developers, those with reputable brands and a large portion of mass-market housing products will benefit most from the latest POBC measures.
  These companies include China Overseas Land & Investment Limited (COLI, Baa1 stable)(00688), Poly Real Estate Group Co Ltd (Baa2 stable), China Vanke Co Ltd (Baa2 stable)(02202), Country Garden Holdings Company Limited (Ba2 stable)(02007) and Shimao Property Holdings Limited (Ba2 stable)(00813).