A man walks past a residential community owned by Chinese real estate developer Evergrande Group in Guangzhou, southern China's Guangdong province, on September 17, 2021.
Noel Sallis | AFP | Getty Images
Shares of Chinese property developers rose on Monday after the central bank launched a series of policy stimulus measures and major mainland cities rolled out easing measures to boost homebuyer sentiment.
this Guangzhou Municipal Government A notice on Sunday said all home-buying restrictions will be lifted starting Monday. Previously, migrant families had to pay at least six months of taxes or social security to buy up to two homes, while singles were limited to one apartment.
this The Shanghai Municipal Government also lowered the The prescribed tax period was changed from three years to one year. The city has also lowered the down payment ratio for first homes to about 15% and for second homes to about 25%, which is higher than the national average of 15%. The rules take effect starting Tuesday, according to a notice late Sunday.
The Shenzhen government has also relaxed Buying restrictions – local families can only buy two homes and singles can only buy one – allow buyers to buy an additional apartment in some areas. Migrant families with at least two children can now buy two homes instead of one, the statement said.
The Hang Seng Mainland Property Index rose 7% on Monday, continuing last week's gain of more than 30%.
Hong Kong-listed real estate developer stocks such as Longfor Group Holdings, Hang Lung Properties, China Resources Land It was one of the stocks with the largest gains in the Hang Seng Index, rising 12.4%, 12.7% and 2.5% respectively. China Overseas Development and Vanke It rose 3.5% and 11.7%, giving up some of the gains in early trading.
Mainland China's CSI 300 index soared 8.5% on Monday, with the index recording its best week in nearly 16 years on Friday. The CSI 300 real estate index rose more than 9%.
Feng Ailun, deputy director of Rhodium Group, said relaxing purchase restrictions could help real estate sales surge in first-tier cities such as Beijing, Shanghai and Guangzhou, noting that similar measures have not worked in China.
Natixis Asia Pacific economist Gary Ng agreed, saying the impact in smaller cities would be more limited “given the higher inventory levels.” Wu said they were more likely to bring some “stability” than turn things around.
The easing measures follow last week's call from the central government to curb the property slump. Authorities “must work hard to curb the decline in the property market and promote a stable recovery,” according to a readout from a high-level meeting chaired by Chinese President Xi Jinping.
The People's Bank of China also lowered existing personal housing loan interest rates by an average of 0.5 percentage points and lowered the average down payment ratio for second home purchases from 25% to 15%.
Real estate, which once contributed more than a quarter of China's GDP, has entered a multi-year slump since Beijing cracked down on high debt levels in the sector in 2020.
Chinese policymakers have been stepping up support to ease the financial burden on households and boost the struggling property sector. But previous measures failed to bring about any meaningful transformation.
Erica Tay, director of macro research at Maybank Investment Bank Group, said China may “need to step up efforts to complete stalled or abandoned pre-sale property construction projects” to boost confidence among potential homebuyers and revive demand.
Nomura Securities analysts led by Dong Jizhou said in a report on September 26 that “quick follow-up of fiscal policies” is crucial, and “if introduced as soon as possible,” these policies will serve to stimulate domestic consumption and stabilize the real estate industry. The ride.
Natixis' Ng said homebuyer demand will slowly bottom out and mortgage growth is expected to stop contracting soon, “but it will take longer and larger measures to see a full and significant rebound in the housing market.”