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Speaker 1: Well, last week we had the announcement that China had

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Speaker 1: unveiled sixteen policy support measures for the property sector. Didn't

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Speaker 1: really change the needle at Moodies though, maintaining a negative

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Speaker 1: outlook for twenty three for the sector. Let's get more

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Speaker 1: insight now with Cavin Sang. He's senior vice president at

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Speaker 1: Moodies Investors Service. So Cavin Moodies rather unmoved by the

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Speaker 1: property support announced by the Chinese government. Why was that? Yeah,

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Speaker 1: good morning if you want Yeah, thanks for the questions. Yeah, Actually,

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Speaker 1: Moodies remain having a negat developer for China's property sector,

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Speaker 1: which reflects our expectation that China's property sales will decline

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Speaker 1: by ten to fifteen in two three and we also

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Speaker 1: expect that that funding condition will women tight for financially

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Speaker 1: big developers. Although we expected that the sales decline will

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Speaker 1: be narrowing from around twenty percent decline in the first

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Speaker 1: ten months of this year, the ten to fiftcent forecast

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Speaker 1: range remain on the high side, and also we expected

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Speaker 1: that the latest government measures would improve the liquidity of developers,

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Speaker 1: but the policy easy will take time to take effect.

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Speaker 1: So as you say, you know, developers are going to

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Speaker 1: be able to access more money from pre home sales.

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Speaker 1: That's going to address some liquidity issues that you mentioned.

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Speaker 1: But do you feel like these measures are really addressingly

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Speaker 1: underlying problems for the property sector in China. Yeah. The

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Speaker 1: latest one of measures is startetting too easy developers funding

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Speaker 1: challenges and if they effectively carry out they will reduce

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Speaker 1: developers liquidity depressure and could support a gradual recovery in

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Speaker 1: market confidence and sales. In particular, some measures is trying

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Speaker 1: to allow privately owned the revelopers to issue onshore bonds

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Speaker 1: and through some government supporting arrangement. And also there are

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Speaker 1: some potential extension of bank and trust long to deal

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Speaker 1: within six months by a year, and this could be

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Speaker 1: reduced developers re financing pressures because they are facing funding

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Speaker 1: constraints since late last year. But having said that, we

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Speaker 1: expect the banks and Trust company to remain selective and

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Speaker 1: cautious about extending this type of financing. And also this

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Speaker 1: type of support is more targeting to the funding constraints

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Speaker 1: of developers and to sustain a recovery of a sector,

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Speaker 1: we would expect a certain measures that lead to be

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Speaker 1: covered hombis confidence and sales in a sustainded manner. Yeah,

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Speaker 1: because that's an issue, isn't that we've had new home

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Speaker 1: prices now falling for fourteen months in a row. What

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Speaker 1: does the demand side look like for property in China

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Speaker 1: UM demand side at this moment. Leaving on the weak side,

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Speaker 1: as we said that UM property sales in the first

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Speaker 1: ten months has been declined by around twenty percent this year,

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Speaker 1: and majority of this decline was driven by the decline

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Speaker 1: in volume, reflecting that the demand from the homebio has reduced.

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Speaker 1: The reasons for the demands include that UM people are

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Speaker 1: cautious about the sectors prospects they expected certain price decline

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Speaker 1: in the futures, and also the economic slowdown that also

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Speaker 1: affect the future outlook UM, especially on the employment status

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Speaker 1: or and then affecting the consumption powers. And also I

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Speaker 1: think we believe that UM the problems of the some

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Speaker 1: financially troubled the developers and leading to some of the

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Speaker 1: presolve but admits unfinished the projects also make homebias cautious

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Speaker 1: at this UH stage from buying copy soul properties from

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Speaker 1: the sectors and therefore all these negative factors has been

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Speaker 1: affecting combiased confidence and sales m I just want to

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Speaker 1: focus in on the implications from COVID policy as well.

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Speaker 1: We have been discussing a lot over the past couple

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Speaker 1: of weeks the possible easing of COVID zero measures in

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Speaker 1: China and the recent upswinging cases is really going to

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Speaker 1: possibly put that shift to the test. Um what degree

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Speaker 1: what an easing of COVID zero policies have on the

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Speaker 1: property market. Um. I think we believe that the COVID

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Speaker 1: policy definitely have certain impact on the property sales. First

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Speaker 1: of all, the COVID UM restrictive policy has affected economic growth,

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Speaker 1: which also affects combias consumption powers. And also the restrictive

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Speaker 1: COVID policy also prevent people from going out you see,

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Speaker 1: need to visit the poverty and buy homes um because

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Speaker 1: of the certain restrictions. And to to one extent that

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Speaker 1: the COVID UM restriction being release and how the property sector,

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Speaker 1: I think we still need to wait and until there

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Speaker 1: are more information or easing measure of of degree of

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Speaker 1: easing has been unveiled. But having said that, because the

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Speaker 1: market situation was of market sentiment has been weickered for

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Speaker 1: quite some time. Investrance and combiased sentiments as a week.

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Speaker 1: It will take time to restore the over confidence and sentiment,

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Speaker 1: even though there's some relaxation right now. Of course, the

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Speaker 1: property crisis claimed another number of big names UM with

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Speaker 1: se Whatever Grand and the Trading Hall for example. It's

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Speaker 1: been there since mid March now. But do you have

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Speaker 1: a sense that all the bad users out there yet

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Speaker 1: or do you think we could still hear from more

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Speaker 1: large developers that are having difficult this UM. In our view, UM,

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Speaker 1: the property sectors actually remain under pressure. As we said,

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Speaker 1: we have a negative alegative outlook for the sectors, which

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Speaker 1: we we fact that that the funding condition for Chinese

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Speaker 1: developers waving on the Thaie side, particularly for those financially

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Speaker 1: weak developers, and also they have a still have a

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Speaker 1: large refinancing these in the next twelve months period and

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Speaker 1: with the funding constraint and not fully resolved, and also

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Speaker 1: that they are facing highly financing needs, we expected that

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Speaker 1: certain developers will still facing these kinds of refinancing challenges

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Speaker 1: and there could also be more default in the coming

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Speaker 1: periods because of that, All right, Caven Zang Or we

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Speaker 1: will have to leave it there, But thanks so much

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Speaker 1: for joining us on Bloomberg daybreak age of today. Cavin

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Speaker 1: Sang is senior vice president at Moody's Investors Services, here

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Speaker 1: to talk about movie retaining that negative outlook for China's

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Speaker 1: property sector in twenty three