On September 29, a fiscal interest subsidy policy for first-home mortgages was announced, expected to stimulate demand in tier-3 and tier-4 home appliance markets. According to the Notice on Implementing Interest Subsidies for Residential Home Purchase Loans issued by the Ministry of Finance, the People's Bank of China, and the National Financial Regulatory Administration, starting October 1 this year, for households purchasing a first home with a newly issued commercial personal housing loan, where the home area does not exceed 120 square meters and the purchase price does not exceed 1.5 million yuan, the government will provide an annualized interest subsidy of 1 percentage point on the loan principal. The subsidy period is up to 5 years, the maximum loan principal eligible for subsidy per household is 1 million yuan, and the implementation period is tentatively set at one year. A senior observer in the home appliance distribution industry told Yicai that the implementation of the mortgage interest subsidy policy is expected to promote transactions of both second-hand and new homes, and will also drive demand for renovation and home appliances. Guo Meide, president of AVC, believes the policy will boost new and second-hand home transactions, bringing incremental demand for bundled home appliance purchases, with the strongest stimulus on tier-3 and tier-4 markets where home prices are lower, while having a weaker impact on tier-1 and tier-2 cities with higher home prices, and limited overall pull on the broader home appliance market, because most current home appliance demand is already replacement demand from existing stock. Wang Hongji, head of home appliance research insights at NIQ GfK China, predicts that whether the policy truly translates into home appliance sales growth depends on actual home purchase data over the coming months. The overall assessment is a positive direction with moderate elasticity, and major appliances are more likely than small appliances to feel the stimulus in sales growth. Home appliance companies have reacted relatively calmly overall. A person in charge at a television manufacturer said the impact is still unclear, while a person in charge at a white goods manufacturer said the policy only targets households buying first homes of small and medium size with rigid demand, so the total related home appliance demand is not large. Moreover, the policy is a one-year trial and renovation has a lag effect, so the impact is expected to be mild, relatively favoring air conditioners and kitchen appliances needed for new home renovation.
Hisense Kelon Electrical Holdings Co LtdMortgage interest subsidy expected to boost home transactions and drive incremental bundled home appliance demand, strongest in tier-3/tier-4 markets where Hisense Kelon sells appliances.
AVC (奥维云网) is cited only as a research firm giving market commentary on the policy's limited overall pull on home appliance demand, not as a subject affected by it.
