Chinese real estate stocks rise on policy support

Shares in Chinese real estate firms jumped on Monday after a series of supportive policy announcements, as regulators stepped up efforts to curb the turmoil in the real estate sector that has weighed on the world’s second-largest economy.

Hong Kong-listed shares of Country Garden’s services unit are up as much as 14 per cent in the morning session, while shares of the listed parent and Longfor Properties are up as much as 6 per cent and 7 per cent, respectively. Hang Seng Mainland Properties is up 5.4 percent as of this afternoon in Hong Kong.

Policymakers have accelerated adjustments to stabilize the deteriorating housing market in recent weeks, including the launch of bailout funds and private loans To help developers complete unfinished homes, which led to a nationwide mortgage boycott.

The People’s Bank of China said Friday that it will cut the interest rate on housing provident fund loans by 0.15 percentage points for first-time homebuyers from October, the first cut in such loans since 2015. more than five years Borrowing from the state housing provident fund will be reduced to 3.1 percent, according to a statement from the People’s Bank of China.

The Finance Ministry on Friday also unveiled a rare tax incentive for homebuyers, which allows individuals who buy new homes within one year of selling their previous homes to enjoy income tax refunds, a move designed to encourage its origin Purchases.

On Thursday, the Banking and Insurance Supervisory Authority and the People’s Bank of China (PBoC) eased minimum mortgage rates for some first-time buyers. In some cities, banks can eliminate minimum housing loan rates and offer cheaper loans to support demand based on their own profitability conditions.

“The three measures . . . will significantly boost the housing market’s momentum in the fourth quarter,” said Yan Yujen, director of research at China Research and Development Institute E-house. “They will help lower the replacement cost of homes and provide burden relief for homebuyers.”

But investors have lost faith in the financial health of Chinese developers, who have defaulted on dollar and renminbi payment obligations. After defaulting on its debts last year, the world’s most indebted real estate developer Evergrande has vowed to restart all troubled projects. end of september.

While policy makers increased support for homebuyers, the lack of clarity on the future measures of real estate companies exacerbated the uncertainty in the market.

Last week, CIFI Holdings’ Hong Kong shares plunged to a record low after the company’s chief predicted “unprecedented” liquidity pressures ahead.

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