Stock prices of Chinese construction companies are on the rise

Efforts by the Chinese government to end a crisis in the country’s real estate sector that has hit the economy hard over the past year appear to be paying off, reports say Cnn.

Shares of China’s biggest real estate developer Country Garden surged as much as 52% in Hong Kong after Beijing unveiled a 16-point plan on Friday to significantly ease lending to the sector.

Key measures include allowing banks to issue maturing loans to developers, support home sales by reducing down payments and mortgage interest rates, encourage other funding channels such as bond issues, and deliver pre-sold homes to buyers.

“Basically, politicians have been telling banks to do everything they can to support the real estate sector,” said Larry Hu, chief China economist at Macquarie Group.

Hong Kong Listed real estate developers increased their value by an average of 11% on Monday.

Many analysts see the bailout package as the strongest signal yet from Chinese authorities that a two-year crackdown on the sector is now over. In August 2020, the government began trying to curb excessive borrowing by developers to curb house prices.

“Delphi” has already announced this year that China’s real estate crisis has worried the world when the real estate giant “Evergrande” faced financial difficulties last autumn, which made the international credit rating company in December “Fitch Ratingsto announce that the company was unable to meet its $300 billion financial commitments. This raised concerns about China’s entire real estate market and a potential global economic crisis caused by the instability of the most populous country some even called the 2008 crisis.

However, the crisis has not reached the extent that some feared, and generally speaking, these issues have not been heard outside of China.

CNN analysts, however, are cautious when it comes to the future, as there is still no data to show that the confidence shown by investors in the stock markets has returned among property buyers in China.