Moody's joined the drumbeat of pessimism on China's property industry, cutting its outlook to negative from stable, but it still expects most rated developers' finances will remain on an even keel.
"We expect a significant slowdown in residential property sales growth, high inventory levels and weakening liquidity over the coming 12 months," Moody's said in a report Wednesday. "A differentiation in the credit quality of developers will become more apparent."
Concerns that China's property market is a popping bubble recently moved to the front burner, with home sales in the four months ended April down 9.9 percent, after slumping 7.7 percent in the first quarter. Property is estimated to account for around 20 percent of the mainland's gross domestic product (GDP).
Read More Who's afraid of China's ghost towns?
Moody's expects sales growth will slow to 0-5 percent over the next 12 months, below 2013's 26.6 percent rise in nationwide contracted sales, with sales in the first half of 2014 likely to decline compared with the first half of 2013.
But while it expects some lower-tier cities will see increasing pricing pressure due to excess supply, it doesn't expect broad-based severe price declines as the government can loosen some of its cooling measures.