The property sector is starting to show more activity as sales recover.
Decline in monthly Chinese property sales is slowing as it contracted 2.6% YoY in April, an improvement from the 12.1% YoY fall in March, according to Moody's Investors Service report.
This is attributable to the property sector’s nationwide contracted sales recovering gradually and offshore bond issuance picking up as the pandemic’s impact in China dissipates according to Danny Chan, Moody's assistant vice president and analyst.
Rated developers outperformed the broader market declining by only 11.7% in April, lower than the 12.9% decline in the broader market. Rated developers' offshore bond issuance picked up in May with three developers issuing bonds totaling US$944m, compared to US$87m in April.
Moody's expects offshore bond issuance for the rest of 2020 to remain modest and selective for issuers with good credit quality.
In addition, Moody's Asian Liquidity Stress sub-indicator for rated high-yield Chinese developers remained at 21.7% in April. Moody’s expects most rated high-yield developers to address maturing bonds maturing through May 2021, despite refinancing costs remaining high over the next 12 months.
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