Fitch sees revival in Chinese homebuilding

The homebuilding sector in China will see rising volumes in 2013 due to improved funding availability to developers and increased regulatory certainty, Fitch Ratings said in a new report on Jan 29.

The year-on-year increases in the first half of 2013 will be higher than in the second half due to comparison with weaker sales registered in the first half of 2012, the report said.

Fitch expects home-purchase restrictions to remain in place, as the Chinese government continues to try to curb excess price increases. However, over the long term, the sector's growth will continue to be underpinned by urbanization and rising household income.

The report also says that polarization of the sector will remain acute, with large operators benefiting from their strong financial position and substantial scale, and smaller players continuing to be challenged by limited financial and operational flexibility. As a result, smaller homebuilders are more vulnerable to an environment of low liquidity and tight regulation.