HK Stock Market Move | Infa stocks rebound across the board; central bank governor says risks in the real estate market have significantly weakened, and the overall transaction level in the market has improved.

The stocks in the real estate sector rebounded across the board. As of the time of writing, SINO-OCEAN GP (03377) rose by 8.72% to 0.237 Hong Kong dollars; SHIMAO GROUP (00813) rose by 8.24% to 0.92 Hong Kong dollars; RONSHINECHINA (03301) rose by 7.55% to 0.285 Hong Kong dollars; CHINA VANKE (02202) rose by 5.8% to 5.11 Hong Kong dollars; YUEXIU PROPERTY (00123) rose by 4.86% to 4.96 Hong Kong dollars. On the news front, People's Bank of China Governor Pan Gongsheng stated at the 18th ASIA FINANCIAL Forum that the risk level of the real estate market has significantly weakened, and the overall transaction level in the market has improved. He mentioned that since October 2024, the sales area of commercial housing in 30 large and medium-sized cities in China has increased month-on-month for three consecutive months and year-on-year for two consecutive months. Western pointed out that based on calculations, China's annual incremental housing demand is approximately 9.2 billion square meters, and it is expected that the residential sales area in 2024 will be 8.1 billion square meters, which is already lower than the incremental housing demand. In 2025, with the low base, it is expected to see a stabilization in sales growth. Moreover, with the adjustment of housing prices in the past two years and the decline in government bond yields, China's rental yield and risk-free return have stopped inverting. Rental yield = risk-free return + risk premium + holding cost. Looking at major cities overseas, most cities have a positive risk premium. In China's major cities, the risk premium is still negative but gradually trending towards 0, providing a foundation for housing prices to stabilize.