Chinese real estate stocks retreat after recent strong rally sparked by policy easing

 

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Shares of Chinese property developers retreat on Thursday after a strong rally in previous trading days. Zhenro Property tumbled more than 12% in Hong Kong, Kaisa Group down 10.5%, Sunac China down 9.5% and China Evergrande Group down 8.9%.

Property developers’ shares staged a strong rally earlier this week driven by a new round of real estate policy relaxations.

The implementation of the latest policy easing, combined with the seasonal factors in the so-called Golden September and Silver October for the real estate sector, is expected to help improve market expectation and short-term pickup is expected tier-one and key tier-two cities’ housing markets, said BOC Securities in a note.

However, as residents’ purchasing power remains weak, the sustainability of the pickup is still to be seen.

China’s new home sales remained subdued during the week of September 4 – 10, with sales by floor area in China’s 54 major cities falling 29% from the previous week, down 20% from a month ago and sliding 30% from a year earlier, said CICC in a research note.  Read more …

Second-hand home sales in China’s 15 major cities declined by 3% in the week from the previous week, down 2% from a month earlier but rising 2% from a year earlier, it said.