2019 Credit Outlook for China Property Developer Sector

China Lianhe’s Viewpoints on the Chinese Property Developer Sector

Amid the spectre of the Sino-US trade tension, a slowing economy and a teetering property market, we believe the policy stance is likely to moderate from the current over-tightening stance with an aim to stabilize land and property prices and manage expectations. The overall policy stance of ‘houses are built for living but not for speculation’ remains unchanged. But some policies are likely to be fine-tuned based on the actual circumstances of each city. We expect that the restrictive purchasing policies in first- and second-tier cities may be loosened further in 2019 but with limited room. For third- and fourth-tier cities, we expect they may continue to face downward price pressure owing to the weakened policy support for monetized resettlement (or reconstruction) of shanty towns.