On Thursday, Chinese property stocks surged amid a drop in local markets, driven by hints of additional policy support for the country’s struggling sector.
Shenzhen tech hub authorities have cut second-home down payments to potentially boost sales during a severe buyer decline. Shenzhen was the second major city to take such an action following a similar move from Guangzhou earlier this year.
The move also came as Beijing readied a whitelist of 50 domestic developers set to secure financing from Chinese banks.
Speculation of the whitelist fueled gains in Chinese property stocks throughout the week, extending to Thursday’s trading session.
Hong Kong-listed Longfor Properties Co. Ltd. rose by 13.08% to HK$15.56, Country Garden Services Holdings Co. Ltd. increased by 11.47% to HK$8.55, and Sunac China Holdings Ltd. climbed by 3.68% to HK$2.82, while China Resources Land Ltd. gained 2.98% to HK$31.15.
Shenzhen-listed China Vanke Co. also surged by 2.45% to CN¥12.13, and Gemdale Corp. soared by 4.73% to CN¥5.76. Hong Kong shares in battered developers Country Garden Holdings Company Ltd. gained as much as 22.35% to HK$1.04, while China Evergrade Group climbed by 5.66% to HK$0.28.
On the other hand, the blue-chip CSI 300 index declined by 0.48% to CN¥3,561.52, while Hong Kong’s Hang Seng index eased by 0.97% to HK$17,919.50.
Investors Seek Additional Aid Amid Property Market Downturn
Investors have been seeking additional government aid for China’s property market amid a three-year sales and price downturn.
The trend has led to a broad cash crunch and caused defaults from major developers like Country Garden and Evergrande. Chinese authorities have also been looking into the two companies.
Earlier this year, Beijing eased property sector capital controls, enabling developers to raise funds through share issuances.
However, investors were still hesitant about the sector, considering the other facets of China’s economy were facing challenges, leading them to maintain a cautious outlook amid broader uncertainties.
Furthermore, Chinese authorities have avoided helping the property sector, seeing the country’s high levels of government debt, further raising concerns about its stability and sustainability.
The real estate market represents a quarter of the world’s second-largest economy and has been a significant growth hindrance over the last three years.
