A housing project under construction in Shenyang, Northeast China's Liaoning Province on Monday. The National Bureau of Statistics said that from January to April, national real estate development investment was 4.02 trillion yuan ($624 billion), a year-on-year increase of 21.6 percent. Photo: cnsphoto

Chinese real estate stocks surged on Monday on the back of the government's support measures for the sector's stable and healthy development. Experts said the new measures send a strong signal that the policymakers want the property industry to return to normalcy.

The property stocks outperformed other companies in the market on Monday. Developers including Guangzhou Yuetai Group, Macrolink Group and Gemdale Group rose by the daily cap of 10 percent. A total of 79 real estate stocks rose, 29 fell and five closed flat.

The People's Bank of China, the central bank, and the China Banking and Insurance Regulatory Commission (CBIRC) released a notice, which detailed 16 measures to ensure the stable and healthy development of the country's real estate sector, domestic news portal eeo.com.cn reported.

The notice outlined the need to stabilize bank lending to developers, and it said that state-owned and private developers should be treated equally, and lenders should support developers' reasonable fundraising needs by appropriately differentiating risks between different companies, eeo.com.cn reported.

Starting from November 11, property developers' outstanding loans and trust borrowings due within six months can be extended as long as 12 months. In addition, trust companies are encouraged to offer reasonable developers funding support, widely viewed favoring the sector's growth, according to eeo.com.cn.

"The 16 measures send a strong signal of stabilizing domestic real estate market and stopping it from further contracting," Song Ding, a research fellow at the Shenzhen-based China Development Institute, told the Global Times on Monday.

Yan Yuejin, research director at Shanghai-based E-house China R&D Institute, told the Global Times on Monday that the new policies set the direction for the country's commercial banks too that is to bolster the embattled real estate sector.

"While encouraging lenders to place importance on supporting developers, the document also indicates that lenders should take the opportunity to support developers in delivering stalled housing projects on time," he said.

To ensure that presale funds are not misappropriated by developers, three government agencies including the central bank issued a notice to lenders on Monday, requiring that the amount of presale funds that developers obtain from homebuyers should be no more than 30 percent of the capital they need to complete housing projects.

Beset by COVID-19 and debt default risks of a couple of major developers, China's property market contracted earlier this year.

During the first nine months this year, sales of residential housing fell 26.3 percent year-on-year to 9.94 trillion yuan ($1.41 trillion), according to data from the National Bureau of Statistics. However, housing sales in September alone rose 39.3 percent from August, showing a robust revival.

(Responsible editor：betting)