The policy primarily targets first-time homebuyers with basic housing needs. The Ministry of Finance estimates that eligible buyers could save up to nearly 50,000 yuan (RMB, same below) in interest payments. Reuters cited analysts saying that due to restrictions on housing prices and floor area thresholds, the policy benefits will tilt more toward second- and third-tier cities and below, with limited impact on first-tier cities. Some people even stated bluntly that the policy's strength is insufficient to reverse the overall weakness in the property market. Real estate stocks rose yesterday in advance but saw a clear pullback at the beginning of today's session.
In addition to the mortgage interest subsidy, policymakers have also introduced measures such as lowering the interest rate on the Pledged Supplementary Lending (PSL) and expanding targeted credit support. On March 29, the People's Bank of China announced a 0.25 percentage point cut in the one-year PSL interest rate, reducing it from 1.75% to 1.5%, while expanding the scope of PSL support and increasing re-lending quotas for scientific and technological innovation and technological transformation. Financial resources will be precisely directed toward key areas including the 'six networks', scientific and technological innovation, equipment upgrades, agriculture, rural areas and farmers (the 'three rurals'), small and micro enterprises, and the private economy.
Additionally, it is reported that the People's Bank of China has established a new re-lending facility to provide low-cost funds to commercial banks and policy banks to help urban investment companies and local government-related enterprises settle overdue payments. Bank stocks weakened in early trading. (ry)