China Developers Rise Amid Policy Speculation: Shanghai Mover

Chinese developers rose by the most in more than a month in Shanghai after a meeting by the ruling Communist Party fueled speculation that the authorities will refrain from imposing further property curbs.

An index tracking Shanghai-listed real estate companies jumped as much as 2.9 percent, the most since Sept. 23, and was up 1.6 percent as of 12:13 p.m. local time. China Vanke Co., the biggest developer by market value traded on the nation’s exchanges, climbed 2.4 percent to 9.30 yuan in Shenzhen after surging as much as 6.3 percent, the most since July 10.

A government statement yesterday, about an Oct. 29 study session on housing by the ruling party’s decision-making Politburo, didn’t mention home prices, triggering speculation policy makers won’t impose further property curbs, according to Credit Suisse Group AG. Premier Li Keqiang has refrained from adding to restrictions even as housing prices have kept rising after his predecessor Wen Jiabao in March stepped up a three-year campaign to make housing affordable.

“Many industry experts and developers I talked to believe this means the central government will refrain from controlling the private housing market,” Jinsong Du, a Hong Kong-based property analyst at Credit Suisse, wrote in an e-mailed note today. “This indeed sounds positive in the near term.”

Home Supply

China requires a housing system under which the government covers basic social housing while “multiple levels” of other housing needs are mainly met by the market, President Xi Jinping said in the statement posted on the central government’s website. The government will try its best to increase home supplies and seeks to meet its target of building 36 million units of affordable housing in the five years ended 2015, according to the statement.

Home prices in China’s four major cities jumped the most since January 2011 last month, as prices climbed in 69 of the 70 cities the government tracks.

China’s economic growth accelerated to 7.8 percent in the third quarter, reversing a two-quarter slowdown. Still, the expansion may slow to 7.1 percent next year from 7.6 percent this year as the government focuses on rebalancing the economy and implementing reforms, Barclays Plc analysts Chang Jian and Joey Chew wrote in a research note on Oct. 18.

China Vanke said Oct. 20 that third-quarter profit rose 18 percent after a 43 percent jump in revenue as stronger demand from homebuyers defied government curbs.

— With assistance by Dingmin Zhang

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