BEIJING: China is expected to roll out more policies to support the financing of real estate developers while improving the effects of policy implementation, amid increased efforts to improve their liquidity, thereby boosting the healthy development of the real estate industry, experts said on Wednesday.
They made the remarks as the share prices of Chinese property developer China Vanke Co declined 3.1 percent on the Shenzhen bourse and 3.49 percent on the Hong Kong bourse at the close of trading on Wednesday.
The slump in Vanke’s stocks came after rating agency Moody’s Ratings on Monday downgraded the developer’s credit rating from Baa3 to Ba1, junk territory.
Experts said they believe China will continue to defuse property sector risks in a steady and orderly manner with market-oriented measures, after the authorities recently issued a series of policies to support real estate in terms of both supply and demand.
“China’s housing market is expected to end its three-year downturn and gradually pick up in the second half of this year, with real estate risks and their spillover effects effectively controlled,” said Wang Qing, chief macroeconomic analyst at Golden Credit Rating International.
Wang added that ample policy space remains for China to reduce home purchase restrictions and lower mortgage rates.
“The country will likely not only continue to cut the over-five-year loan prime rate, a benchmark interest rate commercial banks use for long-term lending, but also lower the floor on mortgage rates for first-time and second-time homebuyers,” he said, adding that this will be a key move in terms of improving market confidence and ensuring the soft landing of the property market.
China’s central bank lowered the five-year loan prime rate by 25 basis points to 3.95 percent on Feb 20, the biggest cut in recent years. For most homebuyers who have a long-term mortgage, the LPR cut will directly reduce their repayment costs. –The Daily Mail-China Daily news exchange item
