By Justina Lee
Hong Kong-listed property developers are up in early trade Monday, following a surprise move by China's central bank to reduce mortgage rates for first-home buyers.
Country Garden Holdings Co. is up 3.4% and Seazen Group Ltd. gains 4.0%. Longfor Group Holdings Ltd., China Resources Land Ltd. and China Overseas Land & Investment Ltd. add 1.5%, 0.6% and 0.4%, respectively. Guangzhou R&F Properties Co. gains 1.5%.
The Hang Seng Mainland Properties index rises 1.7%, trimming year-to-date losses to 15% and outperforming the broader Hang Seng Index's 0.2% rise.
The People's Bank of China said Sunday that it would allow commercial banks to reduce their mortgage rates by up to 20 basis points from the current floors for first-home buyers. It kept the minimum mortgage rates for second-home buyers unchanged.
Property analysts said the move could help revive part of the property market at a time when China's economy is cooling.
"We expect the new mortgage rate pricing mechanism...could help home buyers to save as much as some 70 [basis points in] borrowing cost," CGS-CIMB analysts said in a research note.
Goldman Sachs analysts added that the move "sends a loud and clear signal that policymakers are pushing for property policy easing with concrete measures.
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