China Property: Mortgage subsidies to be rolled out before National Day?

Over the past two trading days, Chinese developers have risen 5% (HSI: +2%), led by distressed names like Sunac, likely driven by market speculation that Chinese authorities may announce a new nationwide mortgage subsidy policy before National Day (1 October). Back in November/December 2025, similar speculation drove similar short-term rallies, although no subsidy policy was announced in the end. While the firm cannot verify the current speculation, it thinks this is a possible policy direction (many cities like Shanghai have already rolled out similar local policies), but whether it is meaningful depends on scale and execution, particularly the cap. A 1ppt subsidy on mortgage rates may lower the effective rate from 3.05% to 2.05%, but if the cap is only Rmb20-50k per unit, the impact is likely limited: for a Rmb5mn loan in Shanghai, a 1ppt subsidy with a Rmb50k cap represents only about 4 months of interest savings. On possible scope: subsidizing all existing mortgages (Rmb38tn outsta