HONG KONG, Jan 6 Reuters Shares of Chinese property developers climbed on Friday, lifted by more state support for the highly indebted sector struggling with weak sales and investments as China reopens its economy.

The central bank said on Thursday that for cities where the selling prices of new homes fall monthonmonth and yearonyear for three consecutive months, the floor on mortgage rates can be lowered or abolished for firsttime home buyers in phases.

China is also planning to relax restrictions on borrowing for property developers by dialing back the three red lines policy, Bloomberg News reported on Friday.

The property sector, which accounts for a quarter of China39;s economy, was badly hit last year as many developers were unable to finish building projects that led to mortgage boycotts by some buyers. Lockdowns and movement control measures to control the spread of COVID19 also hurt buyer sentiment.

Hong Kong39;s Hang Seng Mainland Properties Index firmed 2.3 in midafternoon trade, after jumping close to 4 shortly after the market open.

As of 0709 GMT, Logan Group gained more than 10, while top leader Country Garden rose 6.6. That compared with a flat broader market.

Positive news of state help have mostly been pricedin in the short term after many share prices more than doubled in the past month, said CGSCIMB analyst Will Chu. For the sector to rerate, the market will need to see a meaningful contract sales improvement in March.

China39;s deeply troubled…