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.
was up 3.4% and Seazen Group Ltd.
gained 4.0%. Longfor Group Holdings Ltd.
China Resources Land Ltd.
and China Overseas Land & Investment Ltd.
added 1.5%, 0.6% and 0.4%, respectively. Guangzhou R&F Properties Co.
The Hang Seng Mainland Properties index rises 1.7%, trimming year-to-date losses to 15% and outperforming the broader Hang Seng Index’s
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.