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

Reporters Li Bing and Xiong Yue

Spring tides are rising, and warmth is gradually spreading.

The frontline housing market is experiencing a “warm current,” with market stabilization becoming increasingly clear. Focusing on the strategic goal of “promoting high-quality real estate development” outlined in the 14th Five-Year Plan, and aligning with the 2026 government work report’s emphasis on “stabilizing the real estate market,” policies and financial practices are working together to continuously activate the frontline market and promote a healthy 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. Data from the Shanghai Lianjia Research Institute shows that from March 1 to March 23, 2026, Shanghai’s second-hand home transactions totaled 22,400 units, an 11% increase compared to the same period in 2025. Not only Shanghai, but Beijing, Shanghai, and Shenzhen have also simultaneously lowered individual housing loan interest rates and down payment ratios. These city-specific measures have been fully implemented and are now in a period of steady observation.

The Securities Daily reporters conducted on-site investigations in Beijing, Shanghai, and Shenzhen, engaging with financial institution practitioners, real estate agents, homebuyers, and sellers to comprehensively understand the real situation of the frontline market. Overall, core areas in these cities have shown signs of stabilization, with demand driven by rigid needs and improvement needs becoming the main force in current transactions.

Dual Policy and Financial Support

Effectively Reducing Homeownership Costs

Under the macro policy framework, Beijing, Shanghai, and Shenzhen have introduced tailored easing measures for the housing market, from relaxing purchase restrictions and optimizing mortgage policies to increasing support through housing provident funds, precisely supporting residents’ reasonable housing needs and forming policy synergy.

The “Notice” mentions optimizing policies related to housing purchase restrictions, housing provident fund loans, and personal property taxes. Based on this, local commercial property loan policies have been further improved. Since March 16, Shanghai has adjusted the minimum down payment ratio for commercial properties (including “commercial-residential mixed-use” properties) to no less than 30%.

Li Gen, head of Shanghai Lianjia Research Institute, told Securities Daily, “Currently, the average daily viewings at Lianjia in Shanghai have increased by 30% compared to before the new policies, and the daily new customer intake has increased by 51%. Customer confidence in entering the market has significantly improved, and both viewings and transactions are very active.”

Beijing released two further policy adjustment notices related to real estate in 2025. On August 8, 2025, restrictions outside the Fifth Ring Road were relaxed, allowing unlimited purchases of commercial housing (including new and second-hand homes) outside the ring. On December 24, 2025, the Beijing Municipal Housing and Urban-Rural Development Committee and other departments issued new policies, adjusting the social insurance or personal income tax payment period for non-local residents purchasing within or outside the Fifth Ring Road, and no longer differentiating between first and second homes in interest rate pricing mechanisms.

Multiple major banks in Beijing told us that commercial mortgage rates are based on the 5-year LPR (3.50%), with most banks actually implementing rates around 3.05%. Calculations show that for a second home within the Fifth Ring Road, a loan of 1 million yuan over 30 years with equal principal payments could see monthly payments reduced by over 100 yuan compared to the rate of 3.45% before December 24, 2025, saving thousands of yuan in total repayment.

Shenzhen has implemented measures to optimize and adjust real estate policies since September 6, 2025, including relaxing personal housing loan policies. Commercial loan interest rates no longer distinguish between first and second homes.

“Since last year, first-tier cities have introduced measures such as lowering down payment ratios, reducing loan interest rates, and optimizing purchase restrictions, effectively lowering residents’ barriers to buying homes and creating a strong financial support package that has boosted market sentiment,” said Cao Jingjing, general manager of the Index Research Department at China Index Academy. “The reasons are twofold: first, the new policies are taking effect, releasing potential demand; second, prices in core areas are gradually approaching reasonable levels. The market now shows clear structural differentiation, with active transactions in high-quality projects in core districts, while suburban areas still face inventory pressures.”

With a series of policy measures and financial empowerment, transaction activity in first-tier cities continues to rise. Data from the National Bureau of Statistics released on March 16 shows that in February, the sales prices of commercial residential properties in 70 large and medium-sized cities saw a continued narrowing of month-on-month declines.

In February, the average new commercial residential sales price in first-tier cities was flat compared to the previous month, after a 0.3% decline last month. Prices in Beijing and Shanghai increased by 0.2%, Guangzhou remained unchanged, and Shenzhen decreased by 0.3%. Second-hand residential prices in first-tier cities declined by 0.1% month-on-month, narrowing the decline by 0.4 percentage points from the previous month, with Beijing and Shanghai rising by 0.3% and 0.2%, respectively.

“Objectively, the real estate market in first-tier cities has shown positive signs. The adjustment of prices and the release of policy effects have played a very good comprehensive role,” said Yan Yuejin, deputy director of the E-house China Research Institute. Regarding Shanghai, he noted that the recent increase in market transactions is not driven by a single factor but by multiple positive influences: first, continuous policy benefits and targeted financial support; second, appropriate price adjustments and gradually restoring confidence; third, the existence of latent demand.

Agents “Getting Busy”

Witnessing the Warmth of the Frontline Market

“Sunflowers bloom easily in spring,” and real estate agents on the frontline are most sensitive to market warmth. Under the new policies, transaction activity in Beijing, Shanghai, and Shenzhen has significantly increased.

“By 7 a.m., I had already eaten three eggs and was busy until after 8 p.m.,” said Li Kai (pseudonym), a new home sales agent in Beijing. His experience vividly reflects the market heat after the policies took effect. He said he completed seven contracts just on Saturday, even having to pre-book lunch. Li Kai’s situation is not unique but common among real estate agents in these cities.

At night, a real estate agency in Xicheng District, Beijing, still has bright lights. Three signing rooms are full, banners from satisfied clients hang on the walls, and transaction contracts are being printed continuously, showing a busy scene. Zhang Li (pseudonym), a second-hand home agent, told us that inquiries, listings, and policy consultations have all increased sharply recently. Her office frequently reports successful deals. On March 14 alone, the area completed over 170 transactions, with four districts each selling more than five units, and nine districts each selling four units.

In Shanghai, real estate agents are equally busy. Chen Jun (pseudonym), an agent, said he was still replying to client inquiries at 9 p.m. He noted that since the beginning of the year, market activity has accelerated, with inquiries and viewings continuously rising. On the day the policies were announced, industry peers quickly analyzed, shared, and promoted the news, leading to a further increase in client inquiries. Transactions of high-cost, high-value properties in the central area are particularly active.

A broker from a real estate platform told us that on March 14 alone, the platform’s second-hand home transactions in Shanghai exceeded 1,400 units.

Behind this busyness is the proactive adaptation of the industry. Our visits found that many agencies have strengthened policy training to ensure agents understand the latest policies accurately, especially regarding down payment ratios and mortgage rate adjustments. The busy scenes of agents are the most direct reflection of the current market warming.

Two Sides of Transactions with Different Considerations

Supporting Stable Development of the Industry Chain

The core benefits of the new policies not only benefit homebuyers but also deeply support the entire real estate ecosystem, injecting strong momentum for healthy industry cycles. Precise policy measures, city-specific efforts to stabilize the market, targeted financial support, and proactive actions form a combined force, promoting steady, high-quality industry development and a positive feedback loop in the real estate ecosystem.

First-time buyers feel that “affordable” homes are increasing. Li Hui, working in Beijing, started looking for homes in early 2025. Due to limited budget, he hesitated. The new policies now allow him to afford a small two-bedroom, and he is preparing to make a move soon.

Liu Hong, a white-collar worker in Minhang District, Shanghai, also said that discussions about housing among non-Shanghai residents have increased recently. “With the policy benefits, some friends are also watching and waiting for suitable options.”

Improvement groups are leveraging policy advantages to upgrade their living conditions. The release of replacement demand not only activates existing housing stock but also enhances market liquidity, creating a virtuous cycle of “selling old and buying new.” Wang Zongxu from Shenzhen plans to buy a second-hand home, saying, “I’m still observing, mainly for improvement needs. I want to replace my current home in a core area, which I see as a stable asset allocation.”

Correspondingly, sellers’ attitudes are subtly changing under the new policies. Sellers with replacement needs actively respond by listing properties and offering moderate discounts, hoping to sell quickly and complete exchanges. Some sellers list properties simply to cash out and exit, enriching market supply.

The Securities Daily reporter accompanied buyer Zhang Jun in negotiations over a second-hand property listed at 5.28 million yuan. Before negotiations, the agent indicated the owner’s psychological price might be below 5 million yuan. However, during negotiations, the owner’s attitude shifted, showing reluctance to sell below 5 million, and the deal was not completed within an hour. Such reluctance reflects a gradually restoring market confidence.

Zhang Li said that her area’s transaction volume has indeed rebounded, but prices have not surged overall, with only some high-quality core-area properties showing slight increases.

Overall, after the policies took effect, transaction activity in Beijing, Shanghai, and Shenzhen has continued to rise. Whether for replacement, cash-out, or waiting, market participants are seeking the best solutions based on their needs. This diversified market behavior forms a healthy, orderly real estate ecosystem. The increased activity and rational transactions further reinforce the stabilization trend.

Cao Jingjing believes that this round of policy optimization features “city-specific measures and targeted support,” with coordinated efforts such as loosening purchase qualifications and lowering financing costs, effectively reducing residents’ barriers to homeownership.

More importantly, as a key support for stabilizing and restoring the market, the stabilization and recovery of first-tier cities will continue to send positive signals, helping to solidify the foundation of the entire real estate market.

“Currently, the stabilization of first-tier markets has had a positive impact on the entire industry chain. Take Shanghai’s second-hand market as an example: active transactions in core areas have directly driven rapid growth in subsequent consumption sectors like home decoration, furniture, and appliances,” Yan Yuejin said. “As the real estate market improves and corporate funds stabilize, combined with rising demand for high-quality living, this will also create more market demand for emerging fields like AI and robotics.”

Du Juan, senior researcher at the Suzhou Commercial Bank Research Institute, stated, “The real estate industry has a long chain, from construction materials to home renovation and appliances. Market stabilization is not only a sign of transaction recovery but also a revival of the entire industry chain and a boost to consumption. This multi-dimensional positive feedback continuously improves the real estate ecosystem, forming a virtuous cycle of ‘market stabilization, industry chain recovery, consumption upgrade, and ecological optimization.’”

For homebuyers, Du Juan recommends prioritizing meeting their living needs, considering purchasing power and acting within their means, strengthening awareness of rights protection, paying attention to additional costs, and staying updated on new policies to seek relevant support.

With policies and financial support working together, not only are residents’ barriers to homeownership lowered, but liquidity pressures on developers are eased, and the upstream and downstream industries of real estate are stimulated, injecting lasting momentum into the healthy, high-quality development of the real estate ecosystem.