Before anyone gets too excited at the news that Moody’s Investors Service has maintained its stable outlook for China property developers over the next 12 months, know that all such agencies believe that if they get it right half the time they are doing well. What is very difficult for such agencies are journalists who insist on reading out last year’s forecasts. This does not make them popular.
The Moody’s report, which tends to be more accurate than most, came as China’s banking regulator ordered lenders to take more care when making real-estate loans, widening efforts to prevent property speculators from causing asset bubbles and bad debt.
Banks should not lend to developers found by state agencies to have held land without building houses, the Chinese government said in a statement.
The Sydney Morning Herald reported China’s property prices rose 10.7% in February, the fastest pace in almost two years, fueling concern of asset bubbles in the world’s third-biggest economy.