Hong Kong-listed property developers rose in early trade Monday, following a surprise move by China’s central bank to reduce mortgage rates for first-home buyers.
Country Garden Holdings Co. 2007, +2.94% was up 3.4% and Seazen Group Ltd. 1030, +1.97% gained 4.0%. Longfor Group Holdings Ltd. 960, +1.66%, China Resources Land Ltd. 1109, +0.44% and China Overseas Land & Investment Ltd. 688, +0.22% added 1.5%, 0.6% and 0.4%, respectively. Guangzhou R&F Properties Co. 2777, +0.37% gained 1.5%.
The Hang Seng Mainland Properties index rises 1.7%, trimming year-to-date losses to 15% and outperforming the broader Hang Seng Index’s HSI, -0.44% 0.2% rise.
The People’s Bank of China said Sunday that it would allow commercial banks to reduce their mortgage rates by up to 20 basis points from the current floors for first-home buyers. It kept the minimum mortgage rates for second-home buyers unchanged.
Property analysts said the move could help revive part of the property market at a time when China’s economy is cooling.
“We expect the new mortgage rate pricing mechanism…could help home buyers to save as much as some 70 [basis points in] borrowing cost,” CGS-CIMB analysts said in a research note.
Goldman Sachs analysts added that the move “sends a loud and clear signal that policymakers are pushing for property policy easing with concrete measures.