Shanghai Commercial Property Loan Minimum Down Payment Reduced to 30%

Shanghai adjusts the minimum down payment ratio for commercial property loans.

On March 16, according to the official website of the People’s Bank of China Shanghai headquarters, the Shanghai branch of the People’s Bank of China, together with the Shanghai Regulatory Bureau of the China Financial Supervision and Administration, issued the “Notice on Adjusting the Minimum Down Payment Ratio Policy for Commercial Property Purchases in Shanghai.” The following adjustments have been made to the commercial property loan policy in Shanghai:

Starting March 16, 2026, the minimum down payment ratio for commercial properties (including “commercial-residential mixed-use” properties) in Shanghai will be adjusted to no less than 30%. Banking financial institutions within the jurisdiction should determine the specific down payment ratio for each loan reasonably, based on the lower limit requirements of this notice, combined with their operational conditions and customer risk profiles. In implementation, each bank should fully consider ongoing transactions and other factors to ensure convenience and benefit for the public.

Generally, commercial properties refer to real estate used specifically for commercial activities, including shops, apartments, office buildings, shopping malls, hotels, and other types of real estate products. Among these, commercial apartments are particularly popular. Regarding the down payment ratio, most cities previously set the minimum down payment for commercial properties at around 50%. In January this year, the People’s Bank of China, together with the China Banking and Insurance Regulatory Commission, lowered the minimum down payment ratio for commercial property loans to 30%. Previously, Shenzhen had also adjusted its commercial property loan policies, setting the minimum down payment ratio at no less than 30%.

Li Yujia, chief researcher at the Guangdong Housing Policy Research Center, stated that currently, many regions are facing high inventory levels of commercial properties for sale and long absorption cycles. Additionally, the difficulty in clearing existing inventory leads to challenges in developing land and ongoing projects, with secondary commercial property prices also experiencing significant declines. “In the past, due to the mainly commercial nature, financial discipline for commercial property loans has maintained low leverage. Now, the speculation has largely subsided, and from a business perspective, oversupply has become inevitable. With residents’ willingness to leverage for home purchases decreasing, it is reasonable to loosen restrictions in response to structural loan demands. Moreover, considering banks’ cautious valuation assessments, a 30% down payment is not low, and further reductions may be possible in the future.”

Some analysts suggest that optimizing resource allocation in commercial real estate through lowering the down payment ratio can guide resources toward more efficient sectors and projects. Some underperforming or poorly located commercial real estate projects may attract new investors or operators due to policy incentives, leading to re-planning, renovation, and improved operations, thereby optimizing resource allocation and enhancing overall utilization of commercial real estate.

Zhongzhi Research Institute believes that, in recent years, the high inventory of commercial office markets has become an industry consensus. To promote destocking, many cities have introduced supportive policies, including converting existing commercial office projects into rental housing, supporting building compatibility, and temporarily changing the use of properties. Additionally, many regions offer subsidies for purchasing commercial office properties.

Proofread: Panda