CICC: Shanghai adjusts down housing purchase restrictions to help stabilize local housing prices

China International Capital Corporation (CICC) reports that on February 25, 2026, five Shanghai government departments jointly issued the “Notice on Further Optimizing and Adjusting the City’s Real Estate Policies,” further easing purchase restrictions, optimizing housing provident fund loan policies, and improving individual property tax policies.

Shanghai has relaxed restrictions for non-local residents and improved policies for provident fund loans and property taxes. The adjustments involve three groups of non-Shanghai residents: 1) those who have paid social security or personal income tax for 12 consecutive months can now buy one property within the outer ring; 2) those with 36 months of continuous social security or tax payments can buy up to two properties within the outer ring; 3) non-local residents without social security or tax proof, who have held a residence permit for five years, can buy one property citywide. Shanghai also increased the maximum provident fund loan limit, allowing residents with paid-off loans or holding one property to reapply for a loan, with a 20% increase for families with multiple children borrowing for two properties. Additionally, properties jointly owned by Shanghai residents’ children before adulthood and their parents or grandparents are not counted toward property tax thresholds after they reach adulthood.

Some leading cities have seen positive changes in housing supply and demand structures, with policies possibly accelerating local price stabilization. Recently, the time to sell second-hand homes in Beijing, Shanghai, and other top cities has gradually decreased to levels historically associated with stable prices. The main driver is a reduction in new listings and increased delistings, leading to a continuous decline in existing listings, rather than a short-term rise in transaction volume driven by policy. This suggests social inventory depletion is nearing completion, and prices have a stable foundation. Further targeted policy efforts may speed up local price stabilization, including but not limited to the Central Economic Work Conference’s reiteration of “destocking,” Shanghai’s pilot programs for second-hand home storage, Beijing’s adjustments to purchase restrictions, VAT and personal income tax benefits for second-hand transactions, and demand-stimulating measures in Shanghai. CICC estimates that combined, Beijing and Shanghai contribute about 30% of the national second-hand home transaction volume and 10% of new home transactions, so stabilization in these key cities could help stabilize the overall housing market nationwide.

Full Text

CICC: Shanghai Eases Housing Purchase Restrictions, Potentially Supporting Local Price Stabilization

CICC Research

On February 25, 2026, five Shanghai government departments jointly issued the “Notice on Further Optimizing and Adjusting the City’s Real Estate Policies,” further easing purchase restrictions, optimizing housing provident fund loan policies, and improving individual property tax policies.

Shanghai has relaxed restrictions for non-local residents and improved policies for provident fund loans and property taxes. The recent adjustments involve three groups of non-Shanghai residents: 1) those who have paid social security or personal income tax for 12 consecutive months can now purchase one property within the outer ring; 2) those with 36 months of continuous social security or tax payments can buy up to two properties within the outer ring; 3) non-local residents without social security or tax proof, who have held a residence permit for five years, can buy one property citywide. Shanghai also increased the maximum provident fund loan limit, allowing residents with paid-off loans or holding one property to reapply for a loan, with a 20% increase for families with multiple children borrowing for two properties. Additionally, properties jointly owned by Shanghai residents’ children before adulthood and their parents or grandparents are not counted toward property tax thresholds after they reach adulthood.

Some leading cities have seen positive changes in housing supply and demand structures, with policies possibly accelerating local price stabilization. Recently, the time to sell second-hand homes in Beijing, Shanghai, and other top cities has gradually decreased to levels historically associated with stable prices. The main driver is a reduction in new listings and increased delistings, leading to a continuous decline in existing listings, rather than a short-term rise in transaction volume driven by policy. This suggests social inventory depletion is nearing completion, and prices have a stable foundation. Further targeted policy efforts may speed up local price stabilization, including but not limited to the Central Economic Work Conference’s reiteration of “destocking,” Shanghai’s pilot programs for second-hand home storage, Beijing’s adjustments to purchase restrictions, VAT and personal income tax benefits for second-hand transactions, and demand-stimulating measures in Shanghai. CICC estimates that combined, Beijing and Shanghai contribute about 30% of the national second-hand home transaction volume and 10% of new home transactions, so stabilization in these key cities could help stabilize the overall housing market nationwide.

Watch for investment opportunities in the real estate sector. If local price stabilization becomes more certain, the real estate sector may shift from the pulse-driven policy battles since early January to a more fundamental-driven beta rally. Depending on investor risk appetite, three strategies are suggested: 1) allocate to stable assets with clear beta characteristics; 2) focus on structural growth targets in property development; 3) some private enterprises may return to the “table,” achieving significant revaluation under oversold valuations.

Risks

• Local second-hand home inventories rise due to exogenous shocks
• Supply of new residential land exceeds expectations

Charts and data sources are included in the original report.