HONG KONG, May 16 (Reuters) - Shares of Chinese property developers in Hong Kong jumped on Thursday, after a report that China is considering a plan for local governments nationwide to buy millions of unsold homes from distressed companies to ease a protracted property crisis.

Hong Kong's Hang Seng Mainland Properties Index firmed more than 4% in early trading, with state-backed Sino-Ocean Group surging 46%, and defaulted private developers CIFI Holdings and Shimao Group gaining 21% and 18%, respectively.

Hong Kong's markets were closed on Wednesday for a public holiday and were catching up to gains in mainland property shares the previous day.

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

The report sent the CSI mainland real estate index up 6% at one point before paring gains. It rose 0.9% on Thursday.

Local state-owned 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, adding that many of these homes would then be converted into affordable housing.

China's property sector slipped into a debt crisis in mid-2021. Since 2022, waves of policy measures have failed to turn around the sector that represents around a fifth of the economy and remains a major drag on consumer spending and confidence. (Reporting by Clare Jim; Editing by Kim Coghill and Janane Venkatraman)