New home sales for Chinese homebuilders will further regress by 15% in 2025, posing significant liquidity concerns, especially for privately owned enterprise (POE) developers, Fitch Ratings said in a Wednesday release.
Financial flexibility remains a crucial factor for these homebuilders' credit profiles, with POE developers facing narrower access to onshore bond markets compared to state-owned enterprise ones and continuing to face tight financing conditions, Fitch said.
Most rated homebuilders have shifted their investment strategies toward preserving cash and lessening land bank activities, making financial structure less of a concern, the rating agency said.
Half of Fitch's rated issuers in the sector have a negative outlook, based on the risk of sales remaining unstable despite help from the government.
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