- Shanghai property gauge advances to one-week high after cut
- Analyst forecasts more loosening measures to follow the move
Chinese property shares surged in the domestic market after the central bank cut the minimum mortgage down payment to the lowest in history, prompting expectations of more easing measures.
The Shanghai Stock Exchange Property Index, which tracks 24 developers listed on the city’s exchange, rose as much as 1.2 percent to a one-week high, the only group to advance on the the benchmark Shanghai Composite Index, which dropped as much as 1.8 percent. Guangzhou-based Poly Real Estate Group Co. surged as much as 3.8 percent to the highest in almost a month. Greenland Holdings Corp., the third-biggest developer by sales value last year, traded as much as 4.2 percent higher at a two-week high.
China on Tuesday allowed commercial banks to cut the minimum mortgage down payment for first-home purchases to 20 percent from 25 percent and to 30 percent from 40 percent for second homes, except in five cities with home-buying restrictions. The easing reinforced that more loosening measures will be rolled out as property investment languishes at the weakest in six years, according to Edison Bian, a Hong Kong-based property analyst at UOB Kay Hian Ltd.
“China is set to destock the property market, so the mortgage requirement relaxation is just the first step,” Bian said. “We may see several quarters of policy loosening.”
— With assistance by Emma Dong