China property stocks rally as more cities unveil rescue steps

livemint.com:

Shares of Chinese property developers surged on rising expectations that government entities in China are moving to help buy up excess housing in a bid to revive the struggling real-estate sector. The Hang Seng Mainland Properties Index, which tracks Chinese property developers listed in Hong Kong, was up 5.6% in afternoon trading Thursday.

Sino-Ocean and CIFI rose 46% and 29%, respectively, while Longfor, China Vanke, Agile and Sunac China were each more than 10% higher. Gains were fueled in part by news Wednesday that officials in Hangzhou, a large city near Shanghai, said they would begin buying private residential units in a district with a surplus of homes, using them for public housing.

Similar plans announced Thursday in the far western city of Dali also helped. Those moves come days after the city of Nanjing said it would assist in renovating or purchasing homes to create public housing, while Foshan, a midsize city near Hong Kong and Macau, said it would encourage state-owned enterprises to participate in a housing trade-in program.

Analysts said that altogether the plans, while limited to a handful of cities, are significant. They come weeks after top officials in Beijing signaled a major shift in policy to focus on absorbing excess housing supply in China and creating more public housing.

Analysts at the time said Beijing appeared to be setting the stage for rescue efforts that could range from unprecedented easing of home-buying restrictions to billions in state spending to buy up existing housing inventory. If the government can acquire a meaningful volume of unsold homes from developers, especially privately owned ones, that would resolve the issue of excess inventory and channel funds to cash-strapped