HONG KONG, May 16 Reuters Shares of Chinese property developers rallied on Thursday after a report that China was considering a plan for local governments across the country to buy millions of unsold homes from distressed companies to ease a protracted property crisis.

Hong Kong39;s Hang Seng Mainland Properties Index closed up 4.9 to the highest since Nov 24. The subindex has gained around 30 since midApril, when the market started speculations that more supportive measures be rolled out to stabilize the ailing sector after months of disappointing home sales.

Defaulted private developer Fantasia and KWG Group jumped 63 and 40 respectively, while statebacked SinoOcean Group surged 46.

Hong Kong39;s markets were closed on Wednesday for a public holiday. They have been catching up to gains in mainland property shares since the previous day.

China39;s CSI 300 Real Estate index firmed 3.5 on Thursday, following a 2.2 rise on Wednesday.

Bloomberg News said on Wednesday the State Council was gathering feedback on the preliminary plan from various provinces and government bodies after a meeting of the ruling Communist Party leaders in late April called for efforts to clear mounting housing inventory.

Local stateowned enterprises would be asked to help purchase unsold homes from distressed developers at steep discounts using loans provided by state banks, according to the report, which added that many of these homes would be converted into affordable housing.

The State…