China’s property stocks rose, with the gauge tracking developers on the Shanghai Composite Index advancing for the first time in five days, after a report that said the city of Nanjing offered incentives for some homebuyers.
The property measure increased 1.1 percent at the local close, the biggest gain among five industry groups on the benchmark index. China Vanke Co., the biggest listed developer on mainland exchanges, climbed 1.3 percent to 9.33 yuan in Shenzhen, the biggest gain in more than a week. Poly Real Estate Group Co., the second largest, added 2.1 percent to 11.44 yuan.
Nanjing, in the east, proposed yesterday to promote the property market by offering housing provident fund loans to first-time homebuyers and subsidizing purchases by so-called qualified professionals, China News Service reported yesterday after a press conference by the local government. The city will also allocate as much as 2 billion yuan ($313 million) of provident fund loans to social housing construction by the end of the year, it said.
“It’s a signal that the local governments are trying to further boost the property market,” wrote Eric Zhang, a Beijing-based property analyst at China International Capital Corp., the country’s biggest investment bank, in a note to clients today. “No big relaxation could be accepted by the central government for now, so they chose a smart way of supporting first-home buyers and social housing.”
China won’t relax property controls and ordered local governments that have eased housing policies to “strictly implement” them to prevent a rebound in prices, Xinhua News Agency reported last week, citing an “urgent notice” jointly issued by the land and housing ministries. Local governments should not relax property curbs without authorization, while those that have already eased should immediately correct them, the notice said.
Sales volume will stay “robust” in July, Deutsche Bank AG Hong Kong-based analysts, led by Tony Tsang, said in a report today, citing pricing, availability of mortgage loans for first-home purchases, and improving buying sentiment.
The possibility of further tightening measures is slim, while the government will strengthen implementation of current policies, the analysts wrote.