Fitch: China housing to cool, but caution over mortgage growth

The US-based ratings agency, Fitch ratings, published a latest report on the Chinese property/housing markets, noting that China housing markets are expected to cool, although mortgage lending risks will persist.

Key Quotes:

“China's housing market is expected to cool in 2017 as government measures play a role in easing mortgage lending growth and dampening price rises.“

“However, we still believe growth in mortgage lending could continue to add to risks in the banking sector - with fast-growing, mid-tier banks the most vulnerable.“

“We expect tighter property-market regulations to restrain investment demand in higher-tier cities, contributing to a fall in housing sales of 15% in 2017, following record growth of around 40% in 10M16.”

“A sharp correction in prices is unlikely, but we expect only a small increase in Tier 1 cities, compared with a 24% gain in the first nine months of 2016.”

“Price rises are likely to be even smaller in lower-tier cities - where destocking was marginal in 2016 and did little to bring down developers' large inventories.” 

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