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

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The above images are all taken by Li Bingxiong at a sales office in Beijing.

Reporter Li Bingxiong

Spring tides are surging, and warmth is gradually spreading.

First-tier real estate market

The “warm flow” is surging, and the market stabilization trend is becoming increasingly clear. Closely aligning 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 that emphasizes “stabilizing the real estate market,” policy guidance and financial practices are working in tandem to continuously invigorate the first-tier market and promote a virtuous 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 the “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. According to data from the Shanghai Lianjia Research Institute, 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 also simultaneously lowered personal housing loan interest rates and down payment ratios. The optimization measures specific to each city have been comprehensively implemented, and the relevant policies have entered a stable observation period.

Reporters from the Securities Daily specially conducted on-site research in Beijing, Shanghai, and Shenzhen, engaging in face-to-face dialogues with financial practitioners, real estate agents, home-buying residents, and home-selling owners to comprehensively investigate the real situation of the first-tier market. Based on the overall research, the core areas of the real estate market in the three cities have exhibited signs of stabilization, with demand for home purchases driven by urgent needs and improvements becoming the core force in current market transactions.

Policy and finance working together

Effectively reducing home buying costs

Under the macro policy framework, Beijing, Shanghai, and Shenzhen have all launched location-specific loosening policies for the real estate market, ranging from relaxing purchase restrictions, optimizing commercial loan policies, to increasing housing provident fund support, precisely supporting residents’ reasonable housing needs, forming a policy synergy.

The aforementioned “Notice” shows that policies regarding housing purchase restrictions, provident fund loans, and personal housing property taxes have been optimized and adjusted in seven aspects. Based on this, local commercial real estate credit policies have been further optimized. From March 16, the minimum down payment ratio for purchasing commercial real estate (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 number of property viewings in Shanghai Lianjia has increased by 30% compared to before the new real estate policy, and the daily average number of new clients has increased by 51% compared to before the new policy, showing a significant improvement in client confidence in entering the market, with both viewings and transactions being very active.”

Beijing, on the other hand, issued two notices in 2025 to further optimize and adjust real estate-related policies. On August 8, 2025, the policy relaxed the purchase restrictions outside the Fifth Ring Road, allowing unlimited purchases of commercial housing (including new and second-hand housing) outside the Fifth Ring Road; on December 24, 2025, the Beijing Municipal Housing and Urban-Rural Development Committee and other departments issued new real estate policies again, adjusting the payment of social insurance or personal income tax years for non-local households purchasing commercial housing inside and outside the Fifth Ring Road, and no longer distinguishing between first and second homes in interest rate pricing arrangements.

Reporters from several state-owned banks learned that currently, Beijing’s commercial housing loans are priced based on the 5-year LPR (3.50%), with many banks’ actual execution rates generally at 3.05%. Calculations show that for a second home purchase inside the Fifth Ring Road, taking a loan of 1 million yuan with a principal repayment plan over 30 years, compared to the previous execution rate of 3.45% before December 24, 2025, the monthly payment can be reduced by over a hundred yuan, saving tens of thousands in total repayment.

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

“Since last year, first-tier cities have frequently introduced measures to lower down payment ratios, reduce loan interest rates, and optimize purchase and lending restrictions, effectively lowering the threshold for residents to buy homes, forming a powerful combination of financial support that has driven a marginal recovery in market sentiment,” said Cao Jingjing, general manager of the Index Research Department of the China Index Academy in an interview with the Securities Daily. The reasons are twofold: on the one hand, the new policies have shown results and effectively stimulated the release of potential home-buying demand; on the other hand, the prices of quality segments in core cities have gradually approached reasonable levels. The current market displays a clear structural differentiation, with a high trading activity for quality projects in core urban areas, while inventory pressure remains in suburban areas.

A series of policy combinations coupled with financial empowerment have led to a continuous increase in trading activity in the first-tier cities’ real estate market. On March 16, the National Bureau of Statistics released data on the changes in the sales prices of commercial residential properties in 70 large and medium-sized cities for February, indicating that the month-on-month decline in prices is continuing to narrow.

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

“From the objective data, the first-tier cities’ real estate market has 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. As for the Shanghai real estate market, this round of market transaction volume is not driven by a single factor but is the result of multiple favorable factors acting together: first, the continuous release of policy dividends, with financial empowerment precisely drip-feeding, injecting strong momentum into the market; second, price adjustments are in place, and confidence is gradually being restored; third, potential demand objectively exists.

Real estate agents are “busy”

Witnessing the warmth of the first-tier real estate market

“Sunflowers easily bloom in spring,” real estate agents in the first-tier property market are the most sensitive to the warmth of the market. With the empowerment of the new policies, transaction activity in the real estate markets of Beijing, Shanghai, and Shenzhen has significantly increased.

“I had three eggs for breakfast and was busy until after eight in the evening,” said Li Kai (a pseudonym), a new home salesperson in Beijing, vividly illustrating the market heat after the new policies took effect. He admitted that he completed seven contracts in a single Saturday, needing to book lunch in advance. Li Kai’s situation is not an isolated case but a common phenomenon among real estate agents in Beijing, Shanghai, and Shenzhen.

As night falls, a 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 produces housing transaction contracts, creating a busy atmosphere. Zhang Li (a pseudonym), a second-hand housing agent in Beijing, reported that her phone is constantly ringing with inquiries and viewings. She told reporters that there has been a significant increase in client appointments, homeowner listings, and policy consultation needs recently, with transaction success stories frequently appearing in the store. On March 14 alone, the regional transaction volume exceeded 170 deals, with four districts having more than five deals each and nine districts having four deals each.

Far away in Shanghai, real estate agents are also busy. Agent Chen Jun (a pseudonym) continues to respond to clients’ viewing inquiries even at nine o’clock in the evening. He stated that since the beginning of the year, the market pace has noticeably accelerated, with inquiries and viewings continuing to rise. On the day the “Notice” took effect, industry peers quickly organized to interpret and promote it, further boosting client inquiries, with high-quality properties in the inner ring being particularly active in transactions.

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

Behind this busyness is the proactive change in the real estate agency industry. Visits revealed that many real estate agencies have strengthened policy training to ensure that agents precisely grasp the latest policies and are well-versed in core content such as down payment ratios and housing loan rate adjustments. The busy figures of real estate agents have become the most intuitive and vivid testament to the current market recovery.

Considerations on both sides of the transaction

Supporting the stable development of the industry chain

The core dividend of the new real estate policies not only benefits buyers but also deeply benefits the entire real estate ecosystem, injecting strong momentum into the healthy cycle of the industry. On the policy side, precise strategies and city-specific efforts build a solid foundation for stability, while on the financial side, precise drip-feeding and proactive actions form a synergy, promoting the industry to steadily move toward high-quality development and achieving a positive closed loop in the real estate ecosystem.

First-time homebuyers feel that there are more “affordable” houses available. Li Hui, who works in Beijing, started looking at houses at the beginning of 2025 but has been hesitant due to limited budget. Originally only able to afford a one-bedroom apartment, he can now buy a small two-bedroom apartment after the new policy was implemented, and he plans to take action soon.

Liu Hong, an office worker living in the Minhang District of Shanghai, also admitted that discussions about housing among non-local colleagues and friends have increased recently, “Now with favorable policies, some friends are also gradually observing, looking for suitable properties.”

Improvement-seeking groups are taking advantage of the policy wind to optimize their living conditions. The release of replacement demand not only activates the existing housing stock but also enhances the market’s liquidity, aiding in the formation of a virtuous cycle of “selling the old to buy the new” in the real estate market. Wang Zongxu from Shenzhen plans to purchase a second-hand house, stating, “Currently, I’m still observing, mainly driven by improvement demand, wanting to replace my home in a core area, which I consider a stable asset allocation.”

Contrasting with the active entry of homebuyers, the mentality of sellers is also subtly shifting under the influence of the new policies. Sellers with replacement needs are becoming proactive responders to the new policies, listing their properties and offering moderate discounts in hopes of quickly selling their homes for replacement; some sellers are listing only to cash out, enriching the market supply layers.

A reporter from the Securities Daily once accompanied homebuyer Zhang Jun to negotiate for a desired second-hand house. The listing price for this property was 5.28 million yuan, and before negotiations, the agent revealed that according to the owner’s previous psychological price, the transaction price was expected to drop below 5 million yuan. However, during the negotiation process, the owner’s attitude underwent a significant change, showing a “reluctant sale” mentality and clearly stating that they would not sell for less than 5 million yuan. This negotiation lasted less than an hour and did not reach a deal. However, such individual owners’ reluctance to sell reflects that market confidence is gradually being restored from another perspective.

Zhang Li told reporters that the transaction volume in her area has indeed rebounded, but housing prices have not shown a general increase, with only a slight rise in prices for quality properties in certain core areas.

Overall, after the implementation of the new policies, the activity in the real estate markets of Beijing, Shanghai, and Shenzhen continues to rise. Whether for replacement, cashing out, or waiting, market participants are seeking optimal solutions based on their own needs. This diversified market behavior collectively forms a healthy and orderly real estate ecosystem, while the increase in activity and the rational return of transactions further consolidate the stabilization trend in the real estate market.

Cao Jingjing believes that this round of policy optimization presents characteristics of “city-specific strategies and precise drip-feeding,” effectively lowering the threshold for residents to purchase homes through a gradual loosening of purchasing qualifications and a reduction in financing costs.

More importantly, as an important fulcrum for stabilizing and recovering the entire real estate market, the stabilization and recovery of the first-tier real estate market will continuously release positive signals to the market, contributing to consolidating the foundation of the entire real estate market.

“Currently, the stabilization of the first-tier real estate market has had a positive impact on the upstream and downstream of the industry chain. Taking second-hand housing in Shanghai as an example, the continuous activity in the trading of second-hand houses in core areas directly drives rapid growth in subsequent consumption businesses such as home decoration, furniture, and appliances,” said Yan Yuejin. When the real estate market improves and corporate funding conditions improve, coupled with the rising 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 Commercial Bank Research Institute, stated: “The real estate industry chain is long, covering everything from construction materials to home decoration appliances, encompassing multiple categories. The stabilization of the real estate market is not only a warming of market transactions but also a recovery of the entire industry chain and a boost to consumption. This multidimensional positive feedback continuously improves the real estate ecosystem, forming a virtuous cycle of ‘market stabilization, industry chain recovery, consumption upgrading, and ecological optimization.’”

For homebuyers, Du Juan suggests that the primary focus should be on meeting housing needs; secondly, consider purchasing power, and it is crucial to act within one’s means and enhance awareness of rights protection; third, pay attention to additional expenses and comprehensively manage funds; fourth, stay informed about new policies to seek relevant support.

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

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Editor: Gao Jia