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Moody’s Sounds Alarm For China’s Troubled Property Sector

The ratings agency fears Beijing’s support measures won’t be enough to turn around the fortunes of the country’s real estate giants

Shares of Chinese property giants Country Garden and China Evergrande fell on Monday as further hurdles emerged for each group.
A construction site of residential buildings by Chinese developer Country Garden is pictured in Tianjin, China August 18, 2023. Photo: Reuters


Ratings agency Moody’s sounded the alarm bell for China’s crisis-hit property sector on Thursday, downgrading its outlook to negative from stable, as it predicted an unrelenting fall in home sales despite government support.

Moody’s said it expected contracted sales to fall by about 5% over the next six to 12 months in China, and the impact of government measures to boost property purchases was likely to be short-lived and uneven.


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The outlook downgrade comes amid a string of debt defaults by cash-squeezed developers. China Evergrande Group, the world’s most indebted property developer, is at the centre of the crisis.

The crisis has also engulfed China’s largest private property developer Country Garden Holdings Co, which has been battling to avoid a default, having won approval from its creditors this week to extend the maturity of several onshore bonds.

Credit stress at Country Garden, which Moody’s rates as ‘Ca with a negative outlook’, has amplified investors’ risk aversion, Cedric Lai, an analyst at the agency said in a statement.


  • Reuters with additional editing by Sean O’Meara


Read more:

Country Garden Stock Jumps as Creditors Back Bond Extensions

Hui Ka Yan and The Rise and Fall of China Evergrande

Country Garden Creditors Fear it Won’t Dodge Another Bullet

China Evergrande Sinks 80% as Trading Resumes After 17 Months



Sean O'Meara

Sean O'Meara is an Editor at Asia Financial. He has been a newspaper man for more than 30 years, working at local, regional and national titles in the UK as a writer, sub-editor, page designer and print editor. A football, cricket and rugby fan, he has a particular interest in sports finance.


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