Lotus Asset Management's Hao Hong, on speculation about state aid for the property market: The central government really needs to do something, especially after the disastrous June sales

Lotus Asset Management's Hao Hong, on speculation about state aid for the property market: The central government really needs to do something, especially after the disastrous June sales

A gauge of Chinese property shares posted its biggest gain in nearly nine months, fueled by speculation that a high-level meeting will be held next week to help revive the struggling sector. Shares of Logan Group Co. jumped as much as 85% in Hong Kong, while Sino-Ocean Group Holding Ltd. surged by 37%. The stocks were the top gainers in a Bloomberg Intelligence index of real estate stocks, which was up more than 11% [1].

The rally followed unverified social media reports of a possible high-level meeting next week. Despite the troubles plaguing China's property market, a bright spot has emerged. China Jinmao Holdings ramped up its land purchases for development since late 2024 and saw sales rise by 21% in the first five months of 2025 versus the year-ago period [2].

Lotus Asset Management's Hao Hong stated, "The central government really needs to do something, especially after the disastrous June sales." The June sales figures reflected the continued decline in the real estate sector, with prices falling by 13% from June 2023 to June 2025 in 100 major cities [2].

Officials from China's housing ministry recently visited Guangdong and Zhejiang provinces to inspect the local real estate market, and called for greater stabilization efforts, state media reported. The market is in the process of bottoming, but not yet at its bottom, according to Zhu Ning, author of "China's Guaranteed Bubble" [2].

The impact of the property slump has continued to weigh on consumer sentiment. "Property is key to consumption," Larry Hu, chief China economist at Macquarie, said in a report Friday. "Falling home prices have led to a negative wealth effect on consumption, as housing accounts for 60-70% of household wealth" [2].

References:
[1] https://www.bloomberg.com/news/articles/2025-07-10/chinese-property-shares-surge-on-reports-of-unverified-meeting
[2] https://www.cnbc.com/2025/07/09/cnbcs-the-china-connection-newsletter-the-hidden-drag-on-chinas-economy.html