Chinese stocks rallied on Monday after the government implemented additional support measures for its property sector in an effort to put an end to the sector’s economic struggles. The Hang Seng Enterprises Index rose by 3.2%, led by Longfor Group Holdings Ltd. and China Resources Land Ltd.
Among the measures being implemented by the government is a decrease in the minimum down payment required as well as eased mortgage restrictions for some homebuyers in China’s megacities. According to several local media reports, home sales surged following the new support measures.
“We believe this will trigger a short-term rebound in sales among all tier-1 cities, as this unlocks some previously suppressed upgrade demand,” JPMorgan Chase & Co. analysts wrote in a note with regard to the new incentives. The analysts added that this measure to stabilize the market is the first step to preventing further declines.