China will roll out supportive measures for the property market in order to correct past “mistaken” policies aimed at curbing the sector’s growth, according to the head of a top economic think tank in the country.

“It seems like the government is going to put forward more concrete measures,” said Yao Yang, the dean of the National School of Development at Peking University, in an interview. “The government has to at least stop the decline of the housing market. There are encouraging signs of it.”

Top officials including President Xi Jinping pledged in a policy meeting last week to support housing demand in 2023. “That is a code word for promoting the housing sector again,” Yao said.

Eoin Treacy's view

CNY $1 trillion was allocated to support the property market in August. In November ICBC made the equivalent of $179 billion available to builders. This is concrete evidence the Chinese government is turning back to supporting the property sector.

It suggests there are unlikely to be additional property developer bankruptcies and that property prices will stabilise over the first half of 2023 and particularly when the COVID wave crests.

Country Garden Holdings is currently easing back from its 200-day MA following an impressive short-covering rally. At least some consolidation and ranging looks likely. A sustained move above the 200-day MA will be required to confirm a return to medium-term demand dominance.

Longfor Group posted an even more impressive rebound but is also now pausing in the region of the 200-day MA.

Wharf Real Estate did not fall with the wider property sector but did participate in the rebound.