China's Housing Developer Woes

Moody's has downgraded one of China's largest housing developers' credit rating, as woes in the country's property sector show no sign of abating.

China's real estate market is grappling with unprecedented challenges, with some developers on the verge of bankruptcy and lower property prices deterring consumers from making investments.

Vanke -- long considered to be financially stable -- is one of several major Chinese developers to run into trouble, with Moody's downgrading its rating to "Ba1", indicating it has "substantial credit risk".

It said the firm's contracted sales had fallen around 40 percent -- to $4.8 billion in just the first two months of the year.

"Moody's expects volatile operating and funding conditions for China's property sector to continue to drag on China Vanke's contracted sales, access to funding and liquidity," the rating agency said.

The hurdles facing the firm would continue for "the next 12-18 months", it added.

It did not rule out further downward revisions to Vanke in the future.

Vanke was the second-largest developer in China last year in terms of sales, according to specialist firm CRIC.

It is part-owned by the city government of Shenzhen in southern China -- once seen as a guarantee of its solidity.

But setbacks make it the latest Chinese developer to be caught up in a mounting crisis within the real estate sector, following Evergrande and Country Garden.

The industry, which once experienced two decades of meteoric growth as living standards rose across China, has long accounted for more than a quarter of the country's GDP.

In a bid to revive activity, authorities have introduced various incentive measures and made announcements of state support.