China Launches Mortgage Subsidies to Revive Property Sector

The Government of China will implement a 1-percentage-point interest subsidy on eligible first-home mortgages starting October 1 to combat a prolonged slump in the property sector. The policy applies to first-home buyers with loans under 1 million yuan for apartments up to 120 square meters valued under 1.5 million yuan. This initiative will run for one year, though individual loans may receive subsidies for up to five years.

In a coordinated effort to support the real economy, the People's Bank of China is cutting interest rates for pledged supplementary lending (PSL) by 0.25 percentage points to 1.5%. The central bank is also expanding PSL funding to cover six types of infrastructure, including computing-power networks and power grids.

Additionally, the central bank is increasing relending quotas to benefit small businesses, agriculture, and technological innovation. These measures, announced via a joint statement from the Ministry of Finance and the National Financial Regulatory Administration, aim to stimulate demand in the housing market and accelerate infrastructure development.