China property sales to grow moderately: Moody's

BEIJING - China's property sales will likely show moderate growth over the next 12 months as supportive measures are kicking in, Moody's predicted in a latest report this week.

"We expect year-on-year growth of up to 5 percent in the value of nationwide property sales over the next 12 months, compared with a decline of 7.8 percent in 2014," said Kaven Tsang, a Moody's Vice President and Senior Analyst.

The rating firm attributed the moderate recovery to supportive monetary and regulatory policies implemented since the second half of 2014.

The banks' lower required reserve ratio since February 2015 should release more liquidity into the market and increase their ability to lend to home buyers and property developers, according to the Moody's report.

The three interest-rate cuts since November 2014 will reduce financing costs for buyers who rely on mortgage loans.

Some local governments relaxed home-purchase restrictions, thereby supporting demand from first-time buyers and upgraders.

Nevertheless, Moody's said that prices, mainly in lower-tier cities, will remain under pressure during the coming six to 12 months, but the rate of decline will slow from the sharp fall seen in the second half of 2014 because the gap between supply and demand will narrow.

But property inventory will remain above 2013 levels and continue to limit developers' pricing power, said Moody's.