Chinese property shares surge on expectations of government stimulus

Chinese property developers saw a surge in their shares on Monday, fueled by speculation of upcoming stimulus measures to boost the real estate market. Hong Kong’s Hang Seng Mainland Properties Index rose by 4.3%, while mainland China’s CSI 300 Real Estate Index surged by 6.9%, reaching near four-month highs.

The rally was driven by rumors that the Communist Party Central Committee’s Political Bureau will convene later this month to discuss easing property policies. Private developers like Sunac China, Shimao Group, KWG Group, Zhenro Properties, Fantasia, and Kaisa Group all saw gains of over 20%.

In a positive development for Kaisa Group, a Hong Kong court postponed a hearing to liquidate the company to May 27, as the developer aims to finalize restructuring terms in the next four weeks. State-backed China Vanke also experienced a boost, with shares in Hong Kong rising by 17% and in Shenzhen by 10%.

Despite the recent rally, analysts remain cautious about the sustainability of the market’s recovery. Mark Dong, co-founder of Minority Asset Management in Hong Kong, noted that property sales are still declining, casting doubt on the long-term viability of the current uptrend.

Chinese authorities have implemented various measures to support the property sector, including relaxing home purchase restrictions and expediting loan approvals for developers. However, analysts believe that more substantial policy responses and a significant sales rebound are needed for a sustainable recovery in the real estate market.