[CITIC Securities: Real estate sales are expected to pick up in the fourth quarter, especially in low-tier cities] On September 30, a CITIC Securities research report stated that the implementation of the mortgage interest discount policy is expected to save about one-third of interest costs, and is expected to have a significant promotion effect on real estate transactions in low-tier cities in the fourth quarter. The new policy provides a fiscal discount of 1 percentage point per year for eligible residents’ first home purchase loans, which subsidizes both new homes and second-hand homes. The maximum period of subsidy is 5 years, and the maximum loan size that can enjoy discounts is 1 million yuan. According to the second quarter monetary policy implementation report of the central bank, the interest rate for new personal housing loans in China in June 2026 will be approximately 3.1%. An interest discount of 1 percentage point can save approximately one-third of home buyers’ interest costs. Compared with the previous LPR interest rate cut of about 0.1-0.2 percentage points, the effect of this mortgage discount is more obvious. According to data from the National Bureau of Statistics, from January to August 2026, the transaction area of ​​second-hand houses in China has exceeded that of new houses. House purchase subsidies covering second-hand houses are conducive to activating the replacement chain and activating overall market transactions. However, the policy stipulates that the total price of subsidized houses shall not exceed 1.5 million yuan. It is expected that the houses that meet the regulations are mainly houses in second-tier and lower cities. These are also areas where housing prices will be weak this year. In addition, this interest subsidy is financed by the government, which also avoids the problem of damage to bank interest margins caused by past mortgage interest rate cuts.