SHENZHEN, CHINA – MARCH 9: View of high-rise commercial and residential buildings on March 9, 2016 in Shenzhen, China. The overall economic slowdown continues in China, while real estate prices and the stock bubble face risks. (Photo by Zhong Zhi/Getty Images)
Zhong Zhi | Getty Images News | fake images
Shares of most Chinese property stocks listed in Hong Kong rose to their highest levels in more than a year, as China's stimulus rebound continues.
The real estate sector was the one that gained the most in the Hang Seng IndexLongfor Group Holdings being the main driver, with more than 25%.
Shares of other real estate developers also posted significant gains. Shimao Group soared more than 87%, while Kaisa Group jumped 40.48%, both hitting their highest prices in over a year.
Similarly, China Overseas Land & Investment rose 12.31% to its highest level since last September. China Vanke rose 39.6% to its highest level since August 2023.
Hang Lung Properties and China Resources Land gained 10.01% and 10.82% respectively.
The broader Hang Seng Index added 6%, while the mainland property Hang Seng Index rose more than 14%. Markets in mainland China are closed for the Golden Week holiday.
The continued drag on the real estate sector will leave behind a sizeable demand shortfall, keeping growth below target.
Over the weekend, major cities in mainland China introduced easing measures to improve homebuyer confidence, following a series of policy stimulus initiatives by the central bank last Tuesday.
Guangzhou City Government announced that starting Monday all restrictions on home purchases would be eliminated. Shanghai's required tax payment period reduction also took effect on Tuesday. Shenzhen has also relaxed purchasing restrictions, allowing buyers to purchase one more apartment in selected districts.
While these measures will help stabilize the housing market, raising prices and reviving demand will be a difficult task, Morgan Stanley wrote in a note published Wednesday.
“The continued drag on the real estate sector will leave behind a sizeable shortfall in demand, keeping growth below target,” wrote economists at the Asia-Pacific investment bank.
The real estate sector used to account for more than 25% of China's GDP, but has faced a prolonged slump since 2020 following Beijing's crackdown on excessive debt in the sector.
Chinese officials have increased support to ease financial pressures on households and stabilize the beleaguered property market. However, these previous initiatives have not led to significant changes.