Shares in Chinese developers jumped on Friday, led by Shimao Group, as the market expects more government stimulus for the property market after several big cities removed purchasing curbs over the past week.
Peers China Aoyuan Group gained 28 per cent to HK$0.18 and CIFI Holdings increased 11 per cent to HK$0.40. The Hang Seng Mainland Properties Index, a gauge tracking 10 home builders, advanced 4.2 per cent.
As of Thursday, about 50 Chinese cities have relaxed restrictions on home purchases, with 22 of those lifting all curbs, according to data compiled by Zhuge Real Estate Research Centre. Among China’s biggest cities, only six still have restrictions in place in some areas: tier-1 cities Beijing, Shanghai, Guangzhou and Shenzhen, and tier-2 cities Tianjin and Haikou, Zhuge said.
“The [Politburo] meeting highlighted a major shift in Beijing’s policy direction towards rescuing the property sector,” Ting Lu, Nomura’s chief China economist, said in a note on Friday.
“In our view, Beijing is finally on the right course to clean up the mess in the property sector … We believe Beijing will eventually be forced to rescue numerous pre-sold but unfinished residential projects, which would be a real game-changer to stem the downward spiral in the property sector.”
However, neither home prices nor sales have shown any sign of a big turnaround. Transacted home sales by the top 100 developers extended a decline in April, dropping 44.9 per cent year on year and 12.9 per cent month on month to 312 billion yuan (US$43 billion), according to research firm China Real Estate Information Corporation.
Home prices could drop as much as 6 per cent this year, ratings agency S&P Global said in a report on Monday.