Oct. 27 (Bloomberg) -- Chinese developers surged in Hong Kong trading, led by China Resources Land Ltd. and Evergrande Real Estate Group Ltd., on speculation the government may ease restrictions on home purchases.
Jiang Weixin, Minister of Housing and Urban-Rural Development, said today the government was “forced to” impose the limit on home purchases that was rolled out in 40 cities this year, and will eventually replace them with a housing database that will gather information from banks and tax offices to control the housing market.
“This is the first time the government officially admitted that the home purchase restriction is a temporary measure,” Jeffrey Gao, a Shanghai-based property analyst at Macquarie Securities Ltd., said in a phone interview. “But the market has also overreacted and misunderstood that as the government’s plan to withdraw the restrictions soon.”
State-owned China Resources Land rose 14 percent to HK$11.76 at the close in Hong Kong, the biggest gain in two-and- a-half years, and China Overseas Land & Investment Ltd., the biggest Chinese developer listed in Hong Kong, climbed 12 percent to HK$14.70. The two were the best performers today in the city’s benchmark Hang Seng Index. Evergrande, the nation’s second-biggest developer by sales, surged 14 percent to HK$3.45.
Chinese Premier Wen Jiabao said the government will fine- tune its economic policies as needed in a statement on Oct. 26, while the industry ministry said it is studying policies to stimulate growth among smaller companies amid a global slowdown.
Jiang’s comments at a meeting in Beijing today suggest the government may control the property market using taxes rather than purchase limits after the database is set up, Gao said.
China introduced a property tax this year for the first time in Shanghai and Chongqing. The government also increased down-payment requirements and mortgage rates on some homes to control the risks of asset bubbles this year. Overall home prices are stabilizing after the government’s measures with housing prices declining in some cities, Jiang said.
--Bonnie Cao. Editors: Linus Chua, Andreea Papuc
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