© Reuters
Investing.com– Major Chinese property stocks rose further on Thursday, ducking a broader decline in domestic markets, encouraged chiefly by signs of more policy support for the battered sector.
Authorities in technology hub Shenzhen reduced the down payment required for second home buyers, hoping to stimulate sales amid a severe downturn in buyers. Shenzhen was the second major city to do this after Guangzhou enacted a similar cut earlier this year.
The move came as Beijing prepared a whitelist of 50 local developers that will be able to access quick funding from Chinese banks.
Speculation over the whitelist had driven strong gains in Chinese property stocks this week, which then spilled over into Thursday. Hong Kong-listed Longfor Properties Co Ltd (HK:), Country Garden Services Holdings Co Ltd (HK:), Sunac China Holdings Ltd (HK:) and China Resources Land Ltd (HK:) rose between 1.5% and 8.2%.
Shenzhen-listed China Vanke Co (SZ:) added 3.7%, while Gemdale Corp (SS:) surged 6.5%. Embattled developers Country Garden Holdings Company Ltd (HK:) and China Evergrande Group (HK:) also saw their Hong Kong shares surge 15.3% and 7.6%, respectively.
In contrast, China’s index rose 0.2%, while Hong Kong’s shed 0.3%.
Investors have been clamoring for more government support for the property market, which is dealing with a severe downturn in sales and prices over the past three years.
The trend had triggered a widespread cash crunch, and pushed several high-profile developers, notably Country Garden and Evergrande, into default. Chinese authorities were also seen investigating the two firms.
Beijing had earlier this year loosened capital controls on the property sector, allowing developers to raise capital through share issuances. But investors remained wary of the sector, given that other aspects of China’s economy were also under pressure.
Chinese authorities have also stayed clear of any fiscal support for the property sector, given the country’s already stretched levels of government debt.
The property market accounts for at least a quarter of China’s economy, and has been one of the key weights on growth over the past three years.
