(Bloomberg) — China’s property stocks need a sustainable turnaround in order to foster investor confidence that this year’s broader equities recovery can maintain, or even increase its momentum.
Equities bounced Friday after moves were announced to reduce the lending burden and shrink a housing glut. But analysts are already raising doubts on whether the package is sufficient to end the rout.
Investors will be watching nervously to see if recent rallies in both property shares and the broader market can sustain. They may also want further easing steps from the authorities to bolster sentiment.
A key concern is that acting to further reduce mortgage rates may do little to stop an epic slide in housing prices. Lending costs are already very low, and their recent tumble coincided with steep declines in new home prices. That contrasts with what happened in 2016 and in early 2023, when cheap mortgage costs saw prices pick up.
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