Chinese property shares slid into a bear market as investor optimism from Beijing’s supportive measures over the past few months fizzled.
(Bloomberg) — Chinese property shares slid into a bear market as investor optimism from Beijing’s supportive measures over the past few months fizzled.
A Bloomberg Intelligence gauge of Chinese real estate stocks listed in the mainland and Hong Kong fell 1.7% Thursday, extending declines from a December peak to nearly 21%. The index outpaced losses on the Hang Seng China Enterprises Index, which dropped 1.2%.
While an increase in China’s home sales for the first time in 20 months has helped signal some recovery, buyers remain hesitant to invest in the property sector after its worst downturn. Mixed messages by policymakers have also raised concerns, with Premier Li Keqiang pledging on March 5 to prevent “unregulated” expansion in real estate.
The descent into bear territory comes amid the National People’s Congress in Beijing, where top government officials are laying out the economic road map for the yearahead. Investors have been on the lookout for hints about whether authorities will continue to extend their support for the battered property industry, adding fuel to a historic 88% surge late last year thanks to the nation’s reopening and other positive policies.
“There has been a lack of catalysts amid a semi-lame duck period as leadership transitions under Xi are confirmed in March, but the property sector could get more support after policymakers get back to work,” said Marvin Chen, a strategist at Bloomberg Intelligence.
In November, China rolled out a 16-point package to help embattled real estate companies also while moving to stabilize financing for developers and construction firms. Other measures taken by local governments include loosening restrictions on housing purchases and lowering mortgage rates and down-payment ratios.
(Updates to add analyst comments and background)
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