The Chinese Communist Party (CCP ) Central Committee’s Politburo has called for powerful measures, including limiting the home supply and cutting mortgage rates, to end the free fall of home prices and meet the country’s 5 % annual economic growth target.
According to Beijing’s positive signs on the property industry, shares of the Hong Kong-listed Chinese builders rose on Thursday.  , Longfor Group gained 28.3 % to HK$ 11.78 ( US$ 1.51 ) while Sunac China Holdings was up 26.89 %. China Vanke Co Ltd surged 22.7 % to HK$ 5.73 while China Overseas Land &, Investment rose 15.7 % to HK$ 14.32.
The property stock rally boosted the broad Hang Seng Index, which closed up 4.2 % to 19, 924 points on Thursday, the highest in 15 months. The Shanghai Composite Index ended up 3.6 % at 3, 000 points.  ,
Although the Chinese economy has been frequently steady this year, it is still necessary to take a comprehensive, achievement, and serene view of the current economic situation, face the challenges firmly, and maintain confidence, according to the Politburo meeting held on Thursday.  ,
The meeting’s readout said the country if properly utilize existing policies, step up efforts to roll out progressive policies, make policy measures more focused and efficient, and strive to accomplish the targets and tasks for this year’s economic and social development.
” We should strengthen the counter-cyclical adjustment of our fiscal and monetary policies, ensure necessary fiscal expenditures, and do a good job in the’ three guarantees” ( people’s access to compulsory education, basic medical services and safe housing ) at the grassroots level,” the meeting said”. We may stop the property price reduction. ”  ,
It recommended that the People’s Bank of China ( PBoC ) reduce reserve requirement ratios ( RRRs ), implement significant interest rate reductions, and add more property developers to the” White List” to make it easier for them to borrow from banks.
Additionally, it recommended that regional governments striktly regulate the number of newly constructed residential properties, reduce inventories of real estate, improve the quality of existing homes, and buy unused land from developers for fair prices.
Additionally, the meeting asked local governments to tweak their land, governmental, and economic policies to support property markets.
The PBoC announced its plans to lower borrowing costs and increase lending on Tuesday following the US Federal Reserve’s reduction of its key lending rate, which was 0.5 % to 4.7 % to 5 % on September 18.  ,
Initially, the PBoC lowered RRRs by 50 basis points so that banks could provide an additional 1 trillion yuan ($ 143 billion ) of loans to borrowers. The 7-day reverse mortgage rate, which was cut to 1.7 % in July, was also reduced, but it was also lowered by 10 base points to 1.85 %.  ,
There will be another Clo cut later this month, according to PBoC Governor Pan Gongsheng. He even signaled a 0.2-0.25 % cut in the prime loan rate but did not provide more information.  ,
In a press presentation on September 5, Zhou Lan, the head of the PBoC’s economic policy office, stated that there are still some restrictions on cutting interest rates.
Some economists claim that the PBoC has little space to lower costs because China’s 10-year US Treasury relationship generates are also higher than China’s, which has resulted in significant cash flows from China over the past two years.  ,
Long-term desire
According to the National Bureau of Statistics ( NBS ), prices of new homes in first-tier cities , fell , 4.2 % year-on-year in August. Home prices in Beijing, Guangzhou and Shenzhen declined 3.6 %, 10.1 % and 8.2 %, respectively, while those in Shanghai rose 4.9 %.  ,
Among the 70 important Chinese cities, Shanghai and Xi’an were the only two places that saw a year-on-year boost in house prices last quarter.  ,
In an article published on Tuesday, a Chinese house columnist who uses the name” Uncle Pang” claimed that house prices in the Tianhe city of Guangzhou have dropped 28 % from 65, 000 renminbi to 47, 000 renminbi per square metre over the past year.
He claimed that over the same time span, house prices in the Huangpu district of Guangzhou have decreased by 27 % from 30 000 to 22 000 renminbi per square metre.  ,
He claimed that some home investors had previously assumed that home prices at desirable locations in premium cities would rise after a tiny correction. He claimed that it has not occurred because the years-long adjustment has previously given rise to a long-term marketplace expectation that prices will continue to decline.  ,
Because the property markets in the Guangzhou capital city are very fanciful, he added that Guangzhou’s house prices are falling more than those in Beijing and Shenzhen.  ,
After the PBoC slashed the one-year loan prime rate ( LPR ) by 10 basis points to 3.35 % on July 22, some state-owned banks in Guangzhou started offering mortgage rates as low as 3.1 %, Nanfang Daily reported. China Resources Bank officially began offering mortgage rates of 2.89 % in the late summer of this year.  ,
” Except in top-tier places, there are generally no house restrictions in China today, but home prices also keep falling. Why? The only explanation is that individuals do not have funds to provide the markets,” a Guangdong-based author said in a new article.
” Some people have benefits but their money is declining, especially the younger labor, “he said”. Young people are frequently hit with pay cuts and poverty.
He claimed that homeowners pushed back on their plans to purchase bigger homes because they did n’t want to sell their current homes for low prices. He said traders have even adopted a wait-and-see method.  ,
Read: China on the ears of a Fed price cut issue
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