China Property Developers’ Shares Surge

By Clare Jim

HONG KONG (Reuters) -Shares of China property developers surged on Monday after first-tier cities eased curbs on home purchases, shortly after the Politburo pledged to halt declines in the housing market.

Hong Kong’s Hang Seng Mainland Properties Index jumped over 10% in early trading, while the mainland’s CSI 300 Real Estate index gained around 9%.

The Hong Kong sub-index has surged 40% since last Tuesday after China’s central bank unveiled its largest stimulus since the pandemic.

By 0212 GMT, Shenzhen-based Kaisa Group and Fantasia rallied 45% and 32%, respectively, while Guangzhou-based R&F Properties rose 20%.

Vanke shares in Shenzhen were up 9.5%, and Shanghai-listed Greenland increased 10%.

Guangzhou became the first top-tier city to lift all restrictions on home purchases, while Shanghai and Shenzhen announced easing curbs on housing purchases by non-local buyers and lowering the minimum down payment ratio for first homebuyers to no less than 15%.

Reports indicate that Shanghai and Shenzhen are planning to lift key remaining restrictions to attract buyers.

The central bank stated it would tell banks to lower mortgage rates for existing home loans before Oct. 31, as part of sweeping policies to support the struggling property market amid an economic slowdown.

This easing follows a Politburo meeting where Chinese leaders pledged to achieve a 5% economic growth target for 2024 and halt declines in the housing market, according to state media.

“We see it as a good and swift start to achieving the central government’s target,” investment bank CLSA commented on the easing in a research note.

The brokerage anticipates more liquidity injections from the central government to help destock the property market and address oversupply issues, emphasizing that this process will take time. They expect the property market to bottom out in the second half of 2025.