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China property: new stimulus is on the way as Politburo pledges to cut housing inventory, say analysts
- ‘We believe the policy stance of the Politburo has turned … more supportive to the property sector,’ says Nomura
- However, some observers worried the much-needed support might be too little too late
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A new wave of property stimulus measures is brewing that should fuel a recovery in market sentiment across mainland China as the country’s top decision-makers pledged to tackle housing inventories, according to analysts.
However, some observers worried the much-needed support might be too little too late.
China property shares continued to rally on Thursday as industry leaders China Vanke and Shimao jumped as much as 14.7 per cent and 11.1 per cent respectively in intraday trading.
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The Hang Seng Mainland Properties Index, a gauge tracking 10 home builders listed in Hong Kong, advanced 4.5 per cent to 1,430.88 at the Thursday close, the highest so far this year.
The rally comes as speculation mounts that moves to stimulate the flagging property market are on the way. Top officials at a Politburo meeting on Tuesday said they are assessing comprehensive measures to reduce the housing inventory and boost sales.
“This is a quick, positive policy change, in our view, and we think that policy banks should provide funds to local governments to achieve inventory reduction goals, as was successfully done in China in 2014-2019,” said Raymond Cheng, managing director of CGS International Securities Hong Kong.
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