CICC: Shanghai's policy to reduce housing purchase restrictions may help stabilize housing prices locally

The Zhitong Finance App learned that on February 25, 2026, the five departments of Shanghai jointly issued the “Notice on Further Optimizing and Adjusting the City's Real Estate Policy” to further reduce housing purchase restrictions, optimize housing provident fund loan policies, and improve personal real estate tax policies. The housing supply and demand structure in some leading cities has now changed positively, and policies are cooperating or accelerating the stabilization of local housing prices. If local housing prices stabilize and the certainty increases, the real estate sector may gradually shift from a pulse-style policy game since the beginning of January to a beta market with fundamentals. Depending on the degree of investor bias, there are three types of investment ideas: 1) allocating stable targets with obvious beta characteristics; 2) allocating structural growth targets for real estate development; 3) some private enterprises return to the “card table” and achieve appreciable revaluation under overfalling valuations.

CICC's main views are as follows:

Shanghai has relaxed purchase restrictions for non-Shanghai citizens and optimized provident fund loans and personal real estate tax policies. This Shanghai purchase restriction adjustment involves 3 categories of non-Shanghai residents: 1) non-Shanghai citizens who have paid social security or personal tax for 12 months in a row, increasing the number of units they can buy in the outer ring from 0 to 1; 2) non-Shanghai citizens who have continuously paid social security or personal tax for 36 months, increasing the number of units they can buy in the outer ring from 1 to 2; 3) non-Shanghai residents without social security or personal tax certificates can increase the number of units they can buy from 0 to 1 unit throughout the city. This time, Shanghai has also increased the maximum loan amount for the Provident Fund, allowing residents without a home or with 1 home who have already settled their Provident Fund loans to apply for an Provident Fund loan again. For families with many children, the maximum loan amount for two sets of Provident Fund loans can be increased by 20%. Furthermore, the shared housing shared by children of Shanghai nationality with their parents and (external) grandparents before adulthood is not included in the real estate tax package determination for families after adulthood.

The housing supply and demand structure in some leading cities has now changed positively, and policies are cooperating or accelerating the stabilization of local housing prices. Recently, the second-hand housing listing and removal cycle in some leading cities, such as Beijing and Shanghai, is gradually falling to a range where housing prices have stabilized historically, and the main driving factor is the continuous decline in stock listings due to a decrease in new listings and more withdrawals. It is not a brief rise in transaction volume driven by policy, or indicates that the removal of social inventories is nearing its end, and housing prices have a stable foundation. Further, ongoing policy-side efforts to stabilize local housing prices may accelerate the process of stabilizing local housing prices, including but not limited to initiatives directly addressing inventory issues, such as the Central Economic Work Conference's reintroduction of “inventory removal”, the Shanghai second-hand housing collection and storage pilot, as well as demand-boosting measures such as Beijing purchase restriction adjustments, value-added tax and personal tax concessions for second-hand housing transactions, and Shanghai purchase restriction adjustments. We estimate that Beijing and Shanghai together contribute 30% of the country's second-hand housing transaction amount and 10% of the new housing transaction amount. Stabilizing housing prices in leading cities will help stabilize the basic market of the national housing market.

Focus on investment opportunities in the real estate sector. If local housing prices stabilize and the certainty increases, the real estate sector may gradually shift from a pulse-style policy game since the beginning of January to a beta market with fundamentals. Depending on the degree of investor bias, there are three types of investment ideas: 1) allocating stable targets with obvious beta characteristics; 2) allocating structural growth targets for real estate development; 3) some private enterprises return to the “card table” and achieve appreciable revaluation under overfalling valuations.

Risk warning: Local second-hand housing inventories rose due to exogenous shocks; the volume of newly available housing increased beyond expectations.