Policy and financial dual empowerment: Warmth spreading in the Beijing, Shanghai, and Shenzhen real estate markets

Reporters: Li Bing, Xiong Yue

Spring tides surge, warmth gradually spreads.

The “warm current” of the first-tier housing market flows, and the market stabilization trend becomes increasingly clear. Closely aligned with the strategic direction of “promoting high-quality development of real estate” in the 14th Five-Year Plan, and anchoring the deployment of the 2026 government work report which emphasizes “stabilizing the real estate market,” policy guidance and financial practices work in tandem to continuously activate the first-tier market, promoting a positive cycle in the real estate industry.

On February 25, 2026, the Shanghai Municipal Housing and Urban-Rural Development Management Committee and four other departments issued a notice on “Further Optimizing and Adjusting the City’s Real Estate Policies” (hereinafter referred to as the “Notice”). As of March 25, this new policy has been implemented for one month. Data from the Shanghai Lianjia Research Institute shows that from March 1 to March 23, 2026, 22,400 second-hand homes were sold in Shanghai, an 11% increase compared to the same period in 2025. Not only in Shanghai, but currently, Beijing, Shanghai, and Shenzhen have simultaneously lowered personal housing loan interest rates and down payment ratios, and the optimization measures tailored to each city have been fully implemented, with relevant policies entering a stable observation period.

Reporters from the Securities Daily specially traveled to Beijing, Shanghai, and Shenzhen to conduct field research, engaging directly with various market entities such as financial institution practitioners, real estate agents, homebuyers, and sellers to comprehensively assess the actual situation of the first-tier market. Based on the research findings, the core areas of the housing market in the three cities have shown signs of stabilization, with demand for home purchases driven by necessity and improvement becoming the main force in current market transactions.

Policy and Finance Working Together

Effectively Reducing Home Purchase Costs

Under the macro policy framework, Beijing, Shanghai, and Shenzhen have launched localized housing market relaxation policies, ranging from loosening purchase restrictions and optimizing commercial loan policies to increasing support for housing provident funds, accurately supporting residents’ reasonable housing needs, forming policy synergy.

The aforementioned “Notice” indicates optimization and adjustment of policies in seven areas, including housing purchase restrictions, provident fund loans, and personal housing property taxes. On this basis, local commercial property loan policies have been further optimized. Starting from March 16, the minimum down payment ratio for purchasing commercial properties (including “commercial residential properties”) in Shanghai has been adjusted to no less than 30%.

Li Gen, head of the Shanghai Lianjia Research Institute, stated in an interview with the Securities Daily: “Currently, the daily average viewing volume at Shanghai Lianjia has increased by 30% compared to before the market policy changes, and the daily average number of new customers has increased by 51%. The confidence of customers entering the market has significantly improved compared to before the policy changes, and both viewings and transactions are very active.”

Beijing, on the other hand, released two notices further optimizing and adjusting real estate-related policies in 2025. On August 8, 2025, the policy relaxed purchase restrictions outside the Fifth Ring Road, allowing unlimited purchases of commodity housing (including new and second-hand homes) outside the Fifth Ring. On December 24, 2025, the Beijing Municipal Housing and Urban-Rural Development Committee and other departments released new housing market policies, adjusting the years of social insurance or personal income tax payments required for non-local resident families to purchase commodity housing inside and outside the Fifth Ring, and no longer differentiating between first and second home loan interest rates.

According to several major state-owned banks, the current commercial mortgage rates in Beijing are based on a 5-year LPR (3.50%), with many banks actually implementing rates around 3.05%. A calculation shows that for purchasing a second home within the Fifth Ring, a loan of 1 million yuan with equal principal repayment over 30 years, compared to the 3.45% rate before December 24, 2025, the monthly payment can be reduced by over 100 yuan, saving tens of thousands in total repayments.

Shenzhen has implemented optimized adjustments to real estate policy measures since September 6, 2025, including optimizing personal housing credit policies. Among these, commercial loan interest rates no longer differentiate between first and second homes.

“Since last year, first-tier cities have densely introduced measures to lower down payment ratios, reduce loan interest rates, and optimize purchase restrictions, effectively lowering the threshold for residents to buy homes, forming a powerful financial support combination that has boosted market sentiment,” said Cao Jingjing, general manager of the Index Research Department at the China Index Academy, in an interview with the Securities Daily. The reasons include the effective impact of new policies, which have stimulated potential home buying demand; on the other hand, prices in quality segments of core cities have gradually approached reasonable levels. The current market shows significant structural differentiation, with high transaction activity in quality projects in core urban areas, while inventory pressure still exists in suburban regions.

A series of policy measures combined with financial empowerment have continuously increased the transaction activity in the first-tier city housing markets. On March 16, the National Bureau of Statistics released data on the sales price changes of commodity residential properties in 70 large and medium-sized cities for February, indicating that the month-on-month decline in prices for 70 cities has continued to narrow.

Data from the National Bureau of Statistics shows that in February, the sales prices of newly built commodity residential properties in first-tier cities remained flat compared to the previous month, changing from a 0.3% decline to flat. Specifically, Beijing and Shanghai both increased by 0.2%, Guangzhou remained flat, and Shenzhen decreased by 0.3%; the sales prices of second-hand residential properties in first-tier cities decreased by 0.1%, with the decline narrowing by 0.4 percentage points compared to the previous month, where Beijing and Shanghai rose by 0.3% and 0.2%, respectively.

“From the objective data, the first-tier city housing markets have shown positive performance, especially the adjustment of housing prices and the release of policy effects have played a very good comprehensive effect,” said Yan Yuejin, deputy director of the Shanghai E-House Real Estate Research Institute, in an interview with the Securities Daily. In terms of the Shanghai housing market, the current increase in market transactions is not driven by a single factor but is the result of multiple favorable factors: first, the continuous release of policy dividends and precise financial empowerment have injected strong momentum into the market; second, price adjustments have been in place, and confidence is gradually recovering; third, potential demand objectively exists.

Real Estate Agents “Busy”

Witnessing the Warmth of the First-Tier Housing Market

“The sunflowers bloom easily in spring,” and real estate agents in the first-tier cities can most keenly sense the warmth of the housing market. With the empowerment of the new policies, transaction activity in the housing markets of Beijing, Shanghai, and Shenzhen has significantly increased.

“I had three eggs for breakfast and was busy until after 8 PM.” Li Kai (pseudonym), a new home sales agent in Beijing, vividly illustrates the market heat after the new policy implementation. He admitted that he completed seven contracts in just one Saturday, even needing to book lunch in advance. Li Kai’s experience is not unique but a common phenomenon among real estate agents in Beijing, Shanghai, and Shenzhen.

As night falls, a certain real estate agency in Xicheng District, Beijing, remains brightly lit, with all three signing rooms fully occupied. The walls are adorned with banners sent by homeowners and buyers, and the printing area continuously outputs housing transaction contracts, exuding a busy atmosphere. Zhang Li (pseudonym), a second-hand housing agent in Beijing, mentioned in an interview that she is receiving a continuous stream of inquiries and viewing calls. She told reporters that recently, there has been a significant increase in customer requests for viewings, listings, and policy consultations, with transaction notifications frequently appearing in the store. On just March 14, the regional transaction volume exceeded 170, with four districts completing over five transactions each, and nine districts completing four transactions each.

Far away in Shanghai, real estate agents are equally busy. Agent Chen Jun (pseudonym) is still replying to client inquiries about viewings even at 9 PM. He stated that the market pace has noticeably accelerated since the beginning of the year, with inquiries and viewings steadily increasing. On the day the “Notice” was implemented, industry peers quickly organized to interpret and promote it, further boosting client inquiries, particularly for high-quality listings within the inner ring.

Data provided by an agent from a real estate transaction platform to the Securities Daily shows that on March 14 alone, the transaction volume for second-hand homes in Shanghai exceeded 1,400 units.

Behind this busyness is the proactive transformation of the brokerage industry. Visits revealed that many real estate agencies have intensified policy training to ensure that agents accurately grasp the latest policies and are well-versed in core content such as down payment ratios and mortgage rate adjustments. The busy figures of real estate agents have become the most intuitive illustration of the current housing market recovery.

Considerations on Both Sides of the Transaction

Supporting Healthy Development of the Industry Chain

The core dividends of the new housing policies not only benefit homebuyers but also deeply benefit the entire housing market ecosystem, injecting strong momentum for a positive cycle in the industry. On the policy side, precise measures and city-specific actions have laid a solid foundation for stability, while on the financial side, precise empowerment and proactive actions have formed synergy, promoting the steady advancement towards high-quality development of the industry and achieving a positive loop in the housing market ecosystem.

The feeling of first-time homebuyers is that there are more “affordable” houses available. Li Hui, who works in Beijing, started house-hunting in early 2025 but hesitated due to budget constraints. Initially, he could only afford a one-bedroom unit, but with the introduction of the new policy, he can now afford a small two-bedroom unit and is preparing to make a purchase soon.

Liu Hong, a worker living in the Minhang District of Shanghai, also admitted that discussions about housing among his non-Shanghai colleagues and friends have increased recently. “Now that the policy is favorable, some friends are also slowly observing and looking for suitable listings.”

Improvement-seeking groups are optimizing their living conditions with the help of favorable policies. The release of upgrading demand has not only activated existing housing resources but also enhanced market liquidity, contributing to the formation of a “sell old and buy new” positive cycle in the housing market. Wang Zongxu from Shenzhen plans to purchase a second-hand home and stated, “I am currently still observing, mainly due to improvement needs, wanting to replace my house in a core area. For me, this is a stable asset allocation.”

In contrast to the positive market entry of homebuyers, the mentality of sellers has subtly changed under the influence of the new policies. Sellers with replacement needs have become active responders to the new policies, listing their properties proactively and offering moderate discounts, hoping to sell quickly to complete their upgrades; meanwhile, some sellers list properties merely to liquidate and enrich market supply levels.

Reporters accompanied homebuyer Zhang Jun in negotiating for a desired second-hand home. The listed price for the property was 5.28 million yuan, and before negotiations, the agent revealed that based on the owner’s previous psychological pricing, the transaction price was expected to drop below 5 million yuan. However, during the negotiation, the owner’s attitude showed a clear shift, exhibiting a “reluctance to sell” mentality, clearly stating that the price would not be sold below 5 million yuan. The negotiation lasted less than an hour without reaching a deal. However, the reluctance of individual owners to sell reflects, in one aspect, that current market confidence is gradually recovering.

Zhang Li said that while the transaction volume in her area has indeed increased, housing prices have not shown a general upward trend, with only a slight increase in prices for high-quality listings in certain core areas.

Overall, after the implementation of the new policies, the activity level in the housing markets of Beijing, Shanghai, and Shenzhen has continued to rise. Whether it’s upgrading, liquidating, or observing, market entities are seeking optimal solutions based on their own needs. This diversified market behavior collectively constitutes a healthy and orderly housing market ecosystem, while the enhancement of activity levels and the rational return of transactions further solidify the trend of market stabilization.

In Cao Jingjing’s view, this round of policy optimization exhibits characteristics of “city-specific policies and precise empowerment,” effectively lowering the threshold for residents to purchase homes through graduated loosening of purchasing qualifications and lowering financing costs.

More importantly, as an important pivot for stabilizing and recovering the entire housing market, the stabilization and repair of the first-tier housing market will continuously release positive signals into the market, contributing to the consolidation of the entire real estate market.

“Currently, the stabilization of the first-tier housing market has positively impacted the upstream and downstream of the industry chain. Taking second-hand homes in Shanghai as an example, the sustained activity in the transactions of second-hand homes in core areas has directly driven rapid growth in subsequent consumption businesses such as home renovation, furniture, and appliances,” Yan Yuejin stated. When the real estate market improves and corporate financial conditions enhance, coupled with an increase in people’s demand for high-quality living, it will also bring more market demand to emerging fields such as AI and robotics.

Du Juan, a senior researcher at Suzhou Bank Research Institute, stated: “The real estate industry has a long chain, from construction materials to home decoration appliances, covering multiple categories. The stabilization of the housing market is not only a warming of market transactions but also a recovery of the entire industry chain and a boost to consumption. This multi-dimensional positive feedback continuously improves the housing market ecosystem, forming a virtuous cycle of ‘market stabilization, industry chain recovery, consumption upgrading, and ecological optimization.’”

For homebuyers, Du Juan advises that the primary consideration is to meet housing needs; secondly, consider purchasing power, emphasizing the importance of acting within one’s means and enhancing awareness of rights protection; thirdly, pay attention to additional expenditures and comprehensively plan finances; fourthly, keep timely track of new policies to secure relevant support.

The dual efforts of policy and finance have not only effectively lowered the threshold for residents to buy homes but have also played an important role in alleviating liquidity pressures for real estate companies and driving the recovery of the upstream and downstream industries, injecting lasting momentum for a virtuous cycle and high-quality development of the real estate ecosystem.