Property Sector: An Emerging Medium-Term Investment Case

Since late August, the central government has rolled out two nationwide property policy initiatives: the 28 August measures marking a formal shift in the home sales framework, and the 29 September measures introducing the first central government interest subsidy for household mortgages in recent years. We think the two policies take different routes toward the same goal: broader stabilization of the property sector. On supply, the 28 August measures weaken developers' land acquisition capacity; we estimate funds available for land acquisitions could decline by 33% under the presales model and 41% under the completed-home sales model, while nationwide residential land transaction area fell 32.3% YoY in September, pulling 9M26 down 22.3% YoY. On demand, for an RMB1mn mortgage at 3.05%, a 100bp interest subsidy cuts the monthly payment on a 30-year loan from RMB4,243 to RMB3,721 (-12.3%) and total interest by 35.6%;