A-share property sector continued to rally, with multiple stocks hitting daily
limits, supported by low valuations and rumors of a nationwide mortgage interest
subsidy. Market chatter put fiscal subsidy at 20–50bp plus local subsidy
20–50bp, up to 100bp total, which could push first-home mortgage rates toward
about 2%. Separate rumors said a 100 billion yuan program with a 20bp subsidy
for first-home loans may be announced soon. Several sell-side property analysts
said a nationwide subsidy is unlikely; one analyst said, "At the national level,
extending loan terms is roughly equivalent to a subsidy or rate cut in reducing
interest costs."
