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

CICC Research Report: Shanghai Reduces Housing Purchase Restrictions, Potentially Supporting Local Price Stabilization

CICC Research

On February 25, 2026, five departments in Shanghai 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 optimized policies for provident fund loans and individual property taxes. The adjustment involves three groups of non-local residents: 1) those who have paid social security or personal income tax continuously for 12 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, but with a residence permit for over five years, can purchase one property citywide. Additionally, Shanghai increased the maximum loan amount for the housing provident fund, allowing residents with paid-off or one-property holdings to reapply for provident fund loans, with a 20% increase for families with multiple children borrowing for two properties. Furthermore, properties jointly owned by local children and their parents or grandparents before adulthood are not counted towards their property tax thresholds after reaching adulthood.

Some leading cities have shown positive changes in housing supply and demand structures, with policy support potentially accelerating local price stabilization. Recently, the average time to sell second-hand homes in Beijing, Shanghai, and other top cities has gradually fallen into the range where prices tend to stabilize historically. The main driver is the reduction in new listings and increased delistings, leading to a continuous decline in stock listings, rather than a short-term rise in transaction volume driven by policy. This suggests that social inventory depletion is nearing completion and that 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 property storage, and demand-boosting measures such as adjustments to purchase restrictions in Beijing, VAT and individual income tax benefits for second-hand transactions, and Shanghai’s purchase restriction adjustments. We estimate that combined, Beijing and Shanghai contribute about 30% of the national second-hand home transaction volume and 10% of new home transactions, and stable prices in these leading cities will help stabilize the overall housing market nationwide.

Full Text:

CICC: Shanghai’s Reduction of Housing Purchase Restrictions May Support Local Price Stabilization

CICC Research

On February 25, 2026, five departments in Shanghai 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 optimized policies for provident fund loans and individual property taxes. The adjustment involves three groups of non-local residents: 1) those who have paid social security or personal income tax continuously for 12 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, but with a residence permit for over five years, can purchase one property citywide. Additionally, Shanghai increased the maximum loan amount for the housing provident fund, allowing residents with paid-off or one-property holdings to reapply for provident fund loans, with a 20% increase for families with multiple children borrowing for two properties. Furthermore, properties jointly owned by local children and their parents or grandparents before adulthood are not counted towards their property tax thresholds after reaching adulthood.

Some leading cities have shown positive changes in housing supply and demand structures, with policy support potentially accelerating local price stabilization. Recently, the average time to sell second-hand homes in Beijing, Shanghai, and other top cities has gradually fallen into the range where prices tend to stabilize historically. The main driver is the reduction in new listings and increased delistings, leading to a continuous decline in stock listings, rather than a short-term rise in transaction volume driven by policy. This suggests that social inventory depletion is nearing completion and that 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 property storage, and demand-boosting measures such as adjustments to purchase restrictions in Beijing, VAT and individual income tax benefits for second-hand transactions, and Shanghai’s purchase restriction adjustments. We estimate that combined, Beijing and Shanghai contribute about 30% of the national second-hand home transaction volume and 10% of new home transactions, and stable prices in these leading cities will help stabilize the overall housing market nationwide.

Investment Opportunities in the Real Estate Sector: If local price stabilization becomes more certain, the real estate sector may gradually shift from policy-driven, pulse-like movements since early January to a more fundamental, beta-driven trend. 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 re-enter the “game,” achieving significant revaluation under oversold valuations.

Risks

• Local second-hand inventory rising due to exogenous shocks
• Unexpected increase in new land supply

Figure 1: Core Policy Adjustment Timeline for Top-tier Cities

Source: Government official websites, CICC Research Department

Figure 2: Comparison of Shanghai’s Housing Purchase Restrictions Before and After Adjustment

Source: Government official websites, CICC Research Department

Figure 3: High-frequency Second-hand Home Listing Price Trends in Key Cities

Source: Beike and other agencies, CICC Research Department

Figure 4: Dynamic Price-to-Book and Price-to-Earnings Ratios of A-Share Real Estate Companies

Note: As of February 25, 2026

Source: Company announcements, Wind, CICC Research Department

Figure 5: Dynamic Price-to-Book and Price-to-Earnings Ratios of Hong Kong-listed Real Estate Companies

Note: As of February 25, 2026

Source: Company announcements, Wind, CICC Research Department

(Source: People’s Financial News)