Research Announcement:

Moody's - China property’s very strong sales

growth unsustainable amid tight regulations

Hong Kong, March 30, 2021 --

» The national contracted property sales value increased 143.5% year-on-year in the first two

months of 2021

» Developers’ offshore bond issuance declined in Q1 2021

Moody’s Investors Service says in a report that Chinese national property sales recorded very strong

growth in the first two months of 2021 compared with the same period last year because of a low

base in 2020. But this strong growth will slow in the rest of the year as the government focuses on

the long-term stability of the property sector and on containing systemic risks.
“We expect national property sales to moderate in the rest of 2021 as a tightened credit environment

will curb the growth of property prices and sales volumes. The growth is likely to be front-loaded

because of the low base in the first half of 2020, when sales were disrupted by the coronavirus

outbreak,” says Cedric Lai, a Moody’s Vice President and Senior Analyst.
Specifically, the property sales value for the 30 developers that Moody’s tracks (of the 70 that are

rated) increased 88.0% in the first two months of 2021 compared with a year ago, underperforming

the national market.
Meanwhile, property prices remained strong in the first two months of 2021, mainly driven by Tier 1

and Tier 2 cities. But price growth will moderate in the rest of 2021 as local governments fine-tune

regulatory measures to curb rising prices.
Rated developers’ offshore issuance in the first quarter of 2021 was low at $17.4 billion – a decline

of 27.3% from $23.9 billion in Q1 2020 – partly because of weak investor sentiment. On the other

hand, onshore bond issuance increased 13.3% to reach RMB56.6 billion in Q1 2021 (up to 26

March).

Subscribers can access the report “Property – China: China Property Focus: Very

strong sales growth unsustainable amid tight regulations” at:

http://www.moodys.com/

researchdocumentcontentpage.aspx?docid=PBC_1269675

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This publication does not announce a credit rating action. For any credit ratings referenced in this

publication, please see the ratings tab on the issuer/entity page on

www.moodys.com

for the most

updated credit rating action information and rating history.
Cedric Lai

VP-Senior Analyst

Corporate Finance Group

Moody's Investors Service Hong Kong Ltd.

JOURNALISTS: 852 3758 1350

Client Service: 852 3551 3077
Franco Leung, CFA

Associate Managing Director

Corporate Finance Group

Moody's Investors Service Hong Kong Ltd.

JOURNALISTS: 852 3758 1350

Client Service: 852 3551 3077
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