Shares of Hong Kong-listed property developers rise after China lowers mortgage rates


Hong Kong-listed real estate developers rose in early trading on Monday, following a surprise move by China’s central bank to cut mortgage rates for first-time home buyers.

Country Garden Holdings Co. 2007,
+ 2.71%
increased 3.4% and Seazen Group Ltd. 1030,
+ 1.32%
gained 4.0%. Longfor Group Holdings Ltd. 960,
+ 0.97%,
China Resources Land Ltd. 1109,
+ 0.30%
and China Overseas Land & Investment Ltd. 688,
-0.43%
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 is up 1.7%, reducing losses so far to 15% and surpassing the broader HSI of the Hang Seng Index.
-0.61%
0.2% increase.

The People’s Bank of China said on Sunday that it would allow commercial banks to reduce their mortgage rates by up to 20 basis points on current land for first-time home buyers. It kept the minimum mortgage rates unchanged for second home buyers unchanged.

Real estate analysts said the move could help revive some of the real estate market at a time when China’s economy is cooling.

“Hopefully the new mortgage pricing mechanism … could help homebuyers save up to $ 70 [basis points in] cost of the loan, “CGS-CIMB analysts said in a research note.

Goldman Sachs analysts added that the measure “sends a strong and clear signal that policymakers are pushing to ease real estate policy with concrete measures.



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