Most developers in China can weather a moderate fall in sales in 2020 as they have significant flexibility to control expenditures, according to findings from Fitch Ratings.

Homebuilders' contracted sales have picked up in March, following a 20% to 40% decline nationwide in the first two months of the year. Most sales offices have reopened, and construction activities have largely resumed, the ratings agency says.

Citing preliminary figures, Fitch says that nationwide contracted sales have fallen by up to 15% y-o-y in 2020. It cautions that there may be a heavier rating impact on issuers if it becomes apparent that sales will trend to a decline of more than 20% without the prospect of a quick recovery.

Onshore funding conditions appear to have loosened under the government's direction, it adds. However, a number of small developers with a weak funding record and inability to generate sales will see heightened refinancing risks this year, says Fitch.

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