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Shares in Hong Kong and Shanghai rallied on Tuesday after China unveiled the measures.
But Heron Lim Shi Shun at Moody’s Analytics said the move was expected given gloomy economic data in recent months suggesting Beijing could miss its 2024 growth target.
“But this is hardly a bazooka stimulus,” he told AFP.
“Far more monetary easing and a stronger government stimulus is also desirable to finish bailing out the real estate market and inject more confidence into the economy,” he said.
At a minimum, he added, “broader direct household support in helping them consume more goods will be useful, which is currently just too narrowly designed for industrial goods”.
Another analyst said the “measures are a step in the right direction”.
“We continue to believe that there is still room for further easing in the months ahead,” said Lynn Song, chief economist for Greater China at ING.
Property and construction have long accounted for more than a quarter of China’s gross domestic product, but the sector has been under unprecedented strain since 2020, when authorities tightened developers’ access to credit in a bid to reduce mounting debt.
Since then, major companies including China Evergrande and Country Garden have teetered, while falling prices have dissuaded consumers from investing in property.
Beijing has unveiled a number of measures aimed at boosting the ailing sector, including cutting the minimum down payment rate for first-time homebuyers and suggesting the government could buy up commercial real estate.
But those failed to boost confidence and housing prices have continued to slide.
Adding further strain, local authorities in China face a ballooning debt burden of US$5.6 trillion, according to the central government, raising worries about wider economic stability.
Speaking alongside the central bank chief Tuesday, director of the National Administration of Financial Regulation Li Yunze said Beijing will “actively cooperate in resolving real estate and local government debt risks”.
“China’s financial industry, especially large financial institutions, is operating stably and risks are controllable,” he insisted.
“We will firmly maintain the bottom line of preventing systemic financial risks,” he added.
