Moody's Investors Service said the reduced down-payment requirement for first-time homebuyers in China (Aa3 stable) is credit positive for Chinese property developers, because it will support demand for properties.
"The lowered down-payment to 25% from 30% of the purchase price for
first-time homebuyers will ease their access to the property market, thus
boosting demand," said Kaven Tsang, a Moody's Vice President and Senior Credit Officer.
The new policy, announced on 30 September, applies only to cities that do not otherwise restrict home purchases, thus excluding the four first-tier cities and Sanya, Hainan Province. As such, the policy reflects the government's efforts to boost property demand in second- and lower-tier cities.
"Among our rated developers, those with a strong presence in second-tier cities and large share of sales to first-time buyer should benefit the most," said Tsang.
These include developers like China Overseas Land & Investment (00688) (Baa1 stable), China Vanke (02202) (Baa1 stable), Poly Real Estate Group (Baa2 stable) and Country Garden (02007) (Ba1 stable).
08/10/2015 10:48
Chinese property developers benefit from new loosening
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