BEIJING, May 17 (Reuters) - Shares of Chinese property

developers rose on Friday as investors expected authorities to

announce more measures to stabilise the crisis-hit sector, with

fresh data showing the fastest drop in new home prices in more

than nine years.

Waves of property market support measures over the past two

years have failed to turn a sector which accounted for a fifth

of economic activity at its peak and remains a drag on growth,

but markets are betting on more decisive action later in the

day.

China's housing ministry, central bank, the National

Financial Regulatory Administration and the Ministry of Natural

Resources will hold a news briefing on Friday afternoon about

policies to ensure completion of housing projects.

Investors were also waiting for measures to clear a growing

stock of unsold apartments after Bloomberg News said on

Wednesday the government was gathering feedback on a preliminary

plan to get state-owned firms to purchase some of them.

"Markets look forward to aggressive polices," said Zhang

Dawei, analyst at property agency Centaline. "Supportive

measures such as guaranteeing housing deliveries are expected."

Hong Kong's Hang Seng Mainland Properties Index

climbed 1.5%. China's CSI 300 Real Estate index

was up 0.1%, having already gained 5% this week.

The upbeat mood in the stock market contrasted with the

harsh reality on the ground, highlighted by the frail housing

data on Friday.

New home prices fell for a tenth consecutive month by 0.6%

month-on-month in April, which was worse than a 0.3% fall in

March and the fastest decline since November 2014.

In annual terms, they fell at the steepest pace since July

2015, down 3.1% last month versus a 2.2% drop in March.

A separate data set showed property investment in China in

the first four months of 2024 falling 9.8% from a year earlier,

after dropping 9.5% in the first quarter.

Property sales by floor area in January-April logged a 20.2%

slide year-on-year, while new construction starts fell 24.6%.

Funds raised by China's property developers were also down 24.9%

year-on-year.

Of the 70 cities monitored for the housing data, 64 reported

declines in prices last month, more than the 57 cities that did

so in March.

"The continued decline in property prices will intensify the

wait-and-see sentiment" among would-be buyers, said Guan

Xuerong, senior analyst at Zhuge Real Estate Data Research

Centre.

"The industry adjustment is not yet over. It will take time

for the market to recover."

FRAIL DEMAND

Since the property market soured in 2021, triggering a

series of defaults among developers, China has lowered interest

rates and down payments, while most cities have eased or removed

prior purchase restrictions.

A whitelist developer funding programme for project

completion is also struggling to get traction.

And a campaign flagged by Chinese authorities at a key

political meeting last month to encourage people to replace

their old apartments with new ones is off to a poor start as

buying interest in second-hand homes remains tepid.

Many analysts believe the large stock of uncompleted

residential projects and growing numbers of unsold new homes and

second-hand properties listed for sales require government

intervention to boost developers' cash flows and compensate for

frail market demand for apartments.

Ongoing worries about the overall strength of the economy,

which is powered more by industrial production than domestic

demand, are expected to keep many Chinese away from big spending

decisions in the property market.

"Consumers, who still have shaky expectations of future

incomes, among other things, will continue to be cautious," said

Bruce Pang, Greater China head of research at JLL.

Goldman Sachs estimated this week that saleable housing

inventory was valued at 13.5 trillion yuan ($1.87 trillion) at

the end of 2023 and because some of their construction had not

been finished, it would require 5 trillion yuan of capital

investment to complete them.

It remained unclear how any government intervention would be

funded, with local governments already more than $9 trillion in

debt.