Moody's downgrades China's property sector

Moody's Investors Service on Thursday downgraded China's property sector to "negative" from "stable" as it warned that rising interest rates and reduced bank lending would dampen demand. It also said Beijing's policy moves to tame soaring inflation and ward off a property bubble - including bans on second home buying and trial property taxes - would hurt developers in some cities.
Home purchasing restrictions have taken a bite out of new home sales with volumes in Beijing down nearly 40 percent in the first quarter of 2011, compared with the prior three months, Moody's said. Proceeds from the sale of residential property in the country's first and second-tier cities would fall 25-30 percent over the next year, Moody's said, but added that prices were unlikely to tumble.