China Home Sales Growth to Slow on Property Curbs, Moody’s Says

China’s property sales and prices growth will slow, while the market’s outlook is stable after the government issued property curbs, said Moody’s Investors Service.

Sales growth will decelerate to about 10 percent over the next 12 months from last year amid reinforcement of home-purchase restrictions, Hong Kong-based analysts led by Franco Leung wrote in a report today. Urbanization and favorable mortgage financing for first-time homebuyers will support demand and sales volume, according to the report.

Thirty-five city governments issued details of property measures by an April 1 deadline. Former Premier Wen Jiabao in March ordered the central bank to raise down-payment requirements for second mortgages in cities with excessive cost gains and told local governments with the biggest price pressures to tighten home-purchase limits and set price-control targets.

“Developers are not under high pressure to dispose of their inventories,” Leung told reporters in Hong Kong today. “The roll out of the projects will be gradual and will not be in a rush.”

Developers focused on the mass market, including state-owned China Overseas Land & Investment Ltd. (688) and the country’s biggest developer China Vanke Co. (000002), will enjoy the strongest level of sales, it said.

China’s home prices jumped 5.3 percent from a year earlier last month, the biggest gain since housing costs ended eight months of declines in December, according to SouFun Holdings Ltd. (SFUN), the nation’s biggest real estate website owner.

Sales of major developers last month declined 17 percent from March, according to Jefferies Group Inc. Developers including China Overseas Land and China Resources Land Ltd. (1109) are on track to achieve their full-year sales targets, Christie Ju, a Hong Kong-based property analyst at Jefferies, wrote in a note to clients yesterday.

To contact Bloomberg News staff for this story: Bonnie Cao in Shanghai at bcao4@bloomberg.net; Kelvin Wong in Hong Kong at kwong40@bloomberg.net

To contact the editor responsible for this story: Andreea Papuc at apapuc1@bloomberg.net

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