Investing.com– Shares of major Chinese property developers rose on Tuesday after the People’s Bank said it will extend financial support for the sector until end-2024, as current stimulus measures failed to buoy the ailing sector.
The People’s Bank of China (PBOC) had last November outlined 16 measures to support local property developers, who were battered by a liquidity crisis for nearly three years.
The measures included easy access to financing options and loans, and were also aimed at drawing private investors back into the sector. These measures will now be extended until end-2024, from an earlier expiry date of end-2023, the PBOC said on Monday.
The move heralds more supportive measures for the property sector, as Beijing struggles to shore up economic growth after three years of COVID restrictions. Real estate is one of the biggest economic engines in China, accounting for roughly a quarter of overall gross domestic product.
Shares of major property developers China Vanke Co Ltd (HK:) and Country Garden Holdings (HK:) rose 1.2% and 2%, respectively, in Hong Kong trade, helping the index rise 1.4%.
The Hang Seng Properties Index added 1.1%, while Shenzhen-listed Tianjin Jinbin Development (SZ:) and Beijing Zodi Investment rose 2.8% and 1.7%, respectively.
But despite a slew of stimulus measures, the Chinese economy is still struggling to recover from its COVID-era lows, with weak economic readings for the past three months furthering this notion.
China’s biggest property developers have struggled to raise cash, complete projects and sell properties over the past three years, and have seen little relief so far in 2023, despite the lifting of anti-COVID measures. The sector is also struggling with a mortgage boycott as consumers grew more frustrated with unfinished projects.
Sluggish private investment in China has also dented sentiment, with private investors remaining largely wary of the country amid uncertainty over future policy.
Investors have now called on Beijing to roll out more measures to support the sector, with a high-level government meeting in focus for more stimulus later this month.