Dec. 25 (Bloomberg) -- Chinese real estate developers rose to the highest in 17 months after the government said it would support demand from residents seeking bigger homes, prompting speculation that authorities won’t introduce new property curbs.
A gauge tracking Shanghai-traded developers jumped 4.1 percent to the highest close since July 2011. China Vanke Co., the nation’s biggest listed developer by market value, surged 6 percent to 10.12 yuan at the close of Shenzhen trading. Beijing Urban Construction Investment & Development Co. jumped 6.5 percent. China’s benchmark Shanghai Composite gained 2.5 percent.
The Ministry of Housing and Urban-Rural Development said today it will support “home improvement demand” next year, while keeping in place home-purchase limits to restrict speculation, the official Xinhua News Agency reported. The comments eased concerns that authorities may ramp up efforts to control the property market as home prices and sales rebound, according to CEBM Group, an advisory company.
“People are now thinking that the policy risk may not be as big as they worried it might be,” Luo Yu, CEBM’s Shanghai-based analyst, said by phone. “Should housing policy remain neutral, home sales would continue to rise.”
China’s new home prices rose in the majority of cities the government tracks in November as property curbs slowed construction, reducing the supply available for sale, and banks offered discounts on mortgage rates to first-home buyers. Prices climbed in 53 of the 70 cities tracked from the previous month, compared with 35 in October, according to data from the National Bureau of Statistics. That was the most in 18 months.
Developers are depending on people seeking a bigger second home to sustain a recovery in sales next year, CEBM’s Luo said.
In its more than two-year effort to rein in prices, China has implemented measures including raising down-payment and mortgage requirements for second homes, imposing a property tax for the first time in Shanghai and Chongqing and introducing home-purchase restrictions in about 40 cities.
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