‘Turning point’ for China’s property developers: Beijing measures to ease credit crunch, stabilise sector, analysts say

Beijing’s 16-point rescue plan to stabilise the nation’s wobbling property sector is being hailed by analysts as the clearest sign yet of the government’s determination to resolve the crisis, marking a “turning point” that puts the troubled sector on a path towards a rebound.

The People’s Bank of China (PBOC) and the China Banking and Insurance Regulatory Commission (CBIRC) on Friday jointly issued a notice to financial institutions laying out plans to ensure the “stable and healthy development” of the property sector. The notice included 16 measures, including new policies to address the liquidity crisis among developers, as well as a loosening of down payment requirements for homebuyers.

Chinese property stocks soared on Monday, with Country Garden Holdings surging as much as 55 per cent, CIFI Holdings by 44 per cent, and Longfor Group Holdings by 30 per cent. Country Garden’s share price has more than tripled from HK$1 on October 31 to HK$3.26 at the close on Monday. CIFI Holdings has quadrupled to HK$1.36, and Longfor has more than doubled to HK$21.20 in the same span.

“Together with the previous 250-billion-yuan [US$35.4 billion] bond sale programme support, we view this may mark a turning point for the property sector, as the government is turning to support developers on top of supporting industry,” economist Wang Tao and other UBS analysts said in a report issued on Monday.