Home market seen stable in 2017

11/30/16

Permalink 12:58:13 pm, by dacare, 268 words, 234 views   English (US)
Categories: News of China

Home market seen stable in 2017

China's housing market is expected to be stable next year although regulatory risks remain high amid rapidly rising home and land prices, international ratings firm Moody's said in its latest forecast.

"We expect the growth in nationwide contracted sales by value to be flat or slightly negative in 2017, against a high base of contracted sales for 2016," said Kaven Tsang, vice president and senior credit officer at Moody's. "We estimate sales growth of around 25 percent year on year for 2016."

Tsang predicted that sales volume to fall by 5-10 percent next year as major cities in September and October imposed tightening measures, turning the sector outlook to negative. But the drop will be partly offset by a modest rise in prices.

If sales volume rises by above 10 percent annually on a sustained basis and in a low regulatory risk environment, the outlook could shift to positive, Moody's said.

A sharp price decline seems unlikely in the next six to 12 months, given the relatively low inventory levels in high-tier cities, Moody's said.

Developers' gross margin will stabilize next year due to reduced destocking pressure and improved selling prices, amid the strong contracted sales registered in the past 12 to 18 months, said Moody's, which rated 50 developers in China.

Late on Monday, Shanghai announced down payment for first-time home buyers would be raised to 35 percent from 30 percent from yesterday. People who now don't own a house but have applied for mortgages from either commercial banks or public housing funds anywhere in the country will have to pay a minimum 50 percent down payment as they are considered second-home buyers in the city from now on.

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