Moody’s downgrades China

Moody’s has issued a debt downgrade warning for China’s real estate sector as the coronavirus pandemic slows economic growth and property demand. The ratings agency changed its outlook from stable to negative, as sales contract and inventory remains high. Moody’s expects a 5-10% drop in nationwide sales in 2020. “Market turbulence tied to the coronavirus outbreak is increasing risk aversion among investors and curtailing access to offshore funding, raising refinancing risk for some developers with weak liquidity and credit quality,” said Moody’s vice president and analyst Josephine Ho. It said that while offshore funding conditions are volatile, onshore liquidity will be supported by the government, and it will continue to lend to developers and homebuyers. Moody’s pointed to $92bn in onshore and offshore bonds maturing in April 2021. It said four developers accounting for 5% will face higher refinancing risk. However, most have larger financial buffers and greater funding access to weather the period and address near-term debt maturities. To send feedback, e-mail emma.rosser@egi.co.uk or tweet @EmmaARosser or @estatesgazette