BEIJING, July 25 — Battered Chinese property stocks rallied today after Premier Li Keqiang pledged to support developers and hinted at possible state funding at a cabinet meeting.

Debt-laden developers have come under increasing pressure after the government squeezed funding sources and demand cooled owing to economic uncertainties caused by the pandemic.

Frustrated homebuyers in some cities have also stopped making mortgage payments on units in unfinished projects in recent weeks.

The property market debt crisis has been a major drag on the economy over the past year, and officials have rushed to offer support after dismal second-quarter growth of 0.4 per cent—the worst since the pandemic began.

"City-specific policies will promote the steady and healthy development of the real estate market,” Li said at a cabinet meeting held late Friday, without offering details.

He also urged regulators to "do a good job in policy-based development financial instruments”, hinting at state funding to bailout developers.

The comments pushed the Hang Seng Mainland Properties Index — which tracks major Chinese developers listed in Hong Kong — up more than three per cent today.

Among the top gainers, CIFI Holdings (Group) surged 12 per cent and Guangzhou R&F Properties was up six per cent.

Shanghai-listed Cinda Real Estate, Poly Developers and Gemdale group were all up between three and six per cent.

The announcement comes with embattled Chinese real estate giant Evergrande expected to reach a restructuring agreement with debtors, to whom it owes an estimated US$300 billion (RM1.3 billion).

Property and related industries are estimated to contribute as much as a quarter of China’s gross domestic product.

Dozens of local governments have issued statements in recent weeks relaxing rules for new home buyers to access loans as they scramble to prevent the property crisis from spreading further across the country’s financial system. — AFP