A newly built property is seen from the air in Hangzhou city, Zhejiang province, China, December 15, 2023.
PHOTO | Future publishing | Getty Images
China's real estate stocks jumped after the country's central bank announced measures that would help increase liquidity available to property developers.
The move will ease a persistent cash crunch for Chinese developers who have been the victims of Beijing's tough measures aimed at tackling the sector's bloated debt.
The CSI property index rose 5.2%, while the broader mainland CSI 300 rose 1.8%.
Shares of Hong Kong-listed Country Garden rose 2.94%, Logan Group rose 5.17% and Longfor Group gained 4.61%. The Hang Seng Mainland Properties Index in Hong Kong even rose by 3.9%.
The People's Bank of China and the Ministry of Finance said in a joint statement late Wednesday that these new measures will apply until the end of 2024.
Banks can now grant loans to commercial real estate companies “with good overall performance, which have passed the final inspection and acceptance, received the real estate ownership certificate and have been put into operation with the business property as security.”
It could take years to resolve China's housing crisis. Oxford Economics estimates that real estate developers in the country need at least four to six years to complete unfinished residential properties.
The world's second-largest economy grew 5.2% last year, meeting Beijing's target, even as the real estate sector's slump deepened.
China's real estate developers are struggling with serious debt problems, and some of its biggest players have filed for bankruptcy.
China's real estate problems are closely linked to the finances of local governments, as they typically generate a significant portion of their revenue by selling land to developers.
The worries have exacerbated financial risks and weakened consumer confidence as consumer prices teeter on the brink of deflation.
—CNBC's Clement Tan and Evelyn Cheng contributed to this report.