China International Capital Co (CICC) views the residential mortgage
interest-subsidy as a form of structural monetary policy and estimates the
policy implies roughly CNY180bn in annual fiscal outlays with wide coverage.
Subsidy incidence is skewed to mid- and low-tier cities; ultra-high-tier cities
benefit relatively little. CICC estimates eligibility rates roughly as follows:
ultra-high-tier — 2% new homes, 14% second-hand homes; high-tier — 25% new, 60%
second-hand; mid-low-tier — 50% new, 70% second-hand. The first-year subsidy is
estimated to affect about CNY1.8trn of loans, roughly 40% of annual loan
disbursements, with target households receiving about CNY5,000–10,000 in subsidy
in year one.
