China plans new property-market support package to boost economy – Bloomberg News

Beijing/Hong Kong (Reuters) -China is working on new measures to support the property market after existing policies failed to sustain a rebound in the sector, Bloomberg News reported on Friday, citing people familiar with the matter.

Regulators are considering reducing downpayments in some non-core neighborhoods of major cities, lowering agent commissions on transactions, and further relaxing restrictions for residential purchases under the guidance of the State Council, according to Bloomberg News.

The state council did not immediately respond to Reuters requests for comments.

The property sector, once a pillar of economic growth, slumped sharply last year with developers defaulting on debt or bonds and suspending construction of presold housing projects.

Policymakers have rolled out measures since the second half of 2022 to stabilise the property market that has been further boosted by the lifting of tough COVID curbs in December.

Demand, however, remains bleak with property investment and sales falling in April as consumers remained cautious about big ticket spending amid concerns over incomes and jobs as a post-pandemic recovery loses steam.

The central bank outlined 16 measures of policy support, including loan repayment extensions, in November.

The housing regulator issued a notice in May that requires local real estate brokers to reduce fees for housing transactions and leasing services to promote healthy development of the sector.

UBS says several tier-2 cities have recently announced stimulus for the property market and expectations are rising that other cities will follow suit in coming days.

Meanwhile, China property shares surged on Friday on hopes of further stimulus.

The Hang Seng Mainland Properties Index closed up 9.2% on Friday, outperforming a 4% gain in the broader .

Major developer Longfor Group jumped 17.2%, while smaller peer KWG Group surged 23.3%.

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