C
hinese property shares plummeted on Thursday after officials unveiled measures aimed at boosting the struggling real estate market, but investors deemed them insufficient.

    The moves came in response to dismal economic data over the summer that raised concerns China might miss its 5% target growth rate. In September, leader Xi Jinping announced a stimulus package focused on monetary measures, prompting economists to expect an additional package worth up to 10 trillion yuan ($1.4 trillion) to revive the economy.

    However, Thursday's press conference by the Housing Ministry failed to deliver on those hopes, with officials announcing incremental measures that may not be enough to stabilize the housing market. "The housing supports announced today remain piecemeal in nature," said Larry Hu, chief China economist at Macquarie. "They can help ease financial distress for developers but may not be enough."

    Investors reacted by sending shares in China's benchmark CSI300 real estate index down 5%, reversing days of gains. The Shanghai Composite index traded flat while the Hang Seng index in Hong Kong was half a percent higher.

    The Ministry of Housing and Urban-Rural Development vowed to nearly double bank lending to designated property projects to four trillion yuan ($561 billion) by the end of 2024, but economists remain skeptical about its impact. "We're full of confidence in the recovery of the real estate market," said Housing Minister Ni Hong, but investors are not convinced.

    The ailing property sector is widely seen as the root cause of China's economic woes, accounting for around a quarter of the economy and 70% of household wealth. The government has taken steps to address concerns about stalling growth, including cutting key lending rates and reserve requirements, but so far, these measures have failed to boost confidence in the real estate market.