- The Chinese real estate sector breathed relief on Friday after the central banks promised to provide support.
- The Hang Seng Mainland Properties Index jumped up to 4.8% before reversing its gains.
- China’s property market has suffered a terrible year due to heavy debt loads and low demand.
Chinese real estate stocks got a reprieve on Friday after Beijing promised funding support for the The property sector is in troubleIt is now on the rise after a long-term slump.
Pan Gongsheng, the newly appointed governor of People’s Bank of China, met with eight executives of major developers, including Country Garden Holdings and Longfor Group Holdings.
Gongsheng stated that the central bank’s measures include bond financing for the private sector. CNBC reported.
The Hang Seng Mainland Properties Index jumped as much as 4.8% Friday following the first good news for the sector in some time before paring gains. Longfor shares rose more than 8%, while other developers’ stocks also increased.
China’s real estate sector makes up about a fifth the country’s economy. Its woes held GDP growth in the second quarter at 6.3% compared with the same period last year – well below forecasts of up to 7.1%.
The headwinds are heavy debt loads, slow demand for new real estate, and the fact that potential homebuyers prioritize saving over buying.
The announcement by the Central Bank to boost the slumping economy is a welcome development for developers.
Bloomberg reported on Wednesday that Pinpoint Asset Management’s chief economist, Zhang Zhiwei said, “Under-stressed sector require more financial assistance, and this is the property industry, which is obvious.”
