China has introduced new measures aimed at bolstering its property sector and broader economy amid slowing growth. The finance ministry announced a mortgage interest subsidy for first-time homebuyers, while the People’s Bank of China (PBOC) cut a key lending rate and expanded the scope of certain credit facilities to encourage investment.

Starting tomorrow, first-time homebuyers will be eligible for an annual mortgage interest subsidy of one percentage point for up to five years. The subsidy applies to mortgage loans with a principal of up to 1 million yuan (approximately $149,000) and is limited to properties with a gross floor area of 120 square meters or less and a value not exceeding 1.5 million yuan. This move is designed to support housing demand as new home prices have continued to decline this year.

Separately, the PBOC lowered the interest rate on its one-year pledged supplementary lending (PSL) facility by 25 basis points, reducing it to 1.5 percent. The PSL facility, launched in 2014, provides low-cost funding to policy banks to finance investment projects, particularly in sectors facing credit constraints. The central bank indicated it will broaden the PSL’s scope to include areas such as communications and logistics networks, aiming to better incentivize policy banks to support the real economy.

In addition to the rate cut, the central bank increased the quota for a relending program focused on equipment upgrades and technology development by 200 billion yuan, raising the total to 1.4 trillion yuan. These measures follow a cabinet meeting chaired by Premier Li Qiang on Monday, during which the government emphasized the need to strengthen countercyclical adjustments in macroeconomic policies.

China’s economic growth has slowed significantly, with year-on-year GDP expanding by just 4.3 percent in the second quarter, below the government’s official full-year target range of 4.5 to 5 percent and representing the lowest quarterly growth in decades. Other monthly indicators, including retail sales, have also weakened, prompting expectations of government intervention.

While analysts see the mortgage subsidies as unlikely to provide a large immediate boost in sales, some note their significance lies in Beijing’s direct fiscal support for housing demand and household finances. Earlier in July, the Chinese Communist Party’s politburo pledged to accelerate fiscal spending to sustain economic growth, though it did not announce immediate stimulus actions.

These recent policy steps reflect ongoing efforts by Chinese authorities to stabilize the economy, particularly the troubled property sector that has weighed on domestic confidence for several years.