HONG KONG (Reuters) – Shares of Chinese property developers rose on Thursday on hopes that mainland cities will take more relaxation measures to bolster the beleaguered sector.
The Hang Seng mainland real estate index in Hong Kong jumped more than 5% in morning trade, while the CSI real estate index in China rose more than 4%.
The southern Chinese city of Guangzhou will allow larger house price cuts – up to 20% from 6% previously – Chinese financial news agency Yicai reported Thursday, the largest cut by any top-tier city in the country.
Chinese cities place limits on how much developers can raise or lower their prices. The government is worried about big price cuts because it does not want property prices to fall or the cuts to spark protests from former buyers.
Financial information agency REDD reported Thursday, citing two sources, that President Xi Jinping said in a closed-door meeting in late August that reasonable relaxation policies should be implemented as soon as possible to change the housing market.
Four first-tier cities, Beijing, Shanghai, Shenzhen and Guangzhou, are excluded from their demand for further relaxation, the report said.
Country Garden, Guangzhou R&F Properties, CIFI Holdings, Logan Group and Times China all rose more than 10%, versus 0.5% in the broader market.