On February 25, the Shanghai Municipal Housing and Urban-Rural Development Commission, the Municipal Housing Administration Bureau, and four other departments jointly issued the &#34;Notice on Further Optimizing and Adjusting the City's Real Estate Policies&#34; (hereinafter referred to as the &#34;Notice&#34;), which includes seven policies in three areas: reducing housing purchase restrictions, optimizing provident fund loans, and improving personal property tax.
What benefits do the new &#34;seven policies&#34; bring to homebuyers? What impact will they have on the future trend of the Shanghai real estate market? On February 25, in response to these concerns from citizens, The Paper interviewed several industry experts to interpret the new policies and analyze their impact and future market direction.
<h2>Lowering the Threshold for Home Purchases, Supporting Stable Residential Groups' Housing Demand</h2>
To serve the needs for livable housing, promote the balance between work and residence, and focus on meeting residents' reasonable housing demands, the &#34;Notice&#34; clearly states the further reduction of housing purchase restrictions: First, shorten the required duration of social insurance or individual income tax payments for non-Shanghai residents purchasing housing within the outer ring; second, eligible non-Shanghai residents can purchase one additional housing unit within the outer ring; third, non-Shanghai residents who have held a &#34;Shanghai Residence Permit&#34; for five years or more can purchase one housing unit in the city without needing to provide proof of social insurance or individual income tax payments.
According to the new policy, non-Shanghai residents who have continuously paid social insurance or individual income tax in the city for one year or more before the purchase date can buy an unlimited number of housing units outside the outer ring and are limited to one housing unit within the outer ring; those who have continuously paid for three years or more can purchase two housing units within the outer ring. Those who have held a &#34;Shanghai Residence Permit&#34; for five years or more are limited to one housing unit citywide.
&#34;Analyzing the reduction of housing purchase restrictions, this new policy lowers the threshold for home purchases and increases the number of units that can be purchased,&#34; said Yan Yuejin, deputy director of the Shanghai E-House Real Estate Research Institute. He pointed out that the policy has shortened the required social insurance payment period for non-Shanghai residents purchasing housing within the outer ring to one year, and for non-Shanghai families with three years of social insurance, they can now purchase two housing units within the outer ring, indicating that the threshold for non-Shanghai residents to buy homes in Shanghai has been further lowered, or the waiting costs are decreasing.
At the same time, the new policy also supports the housing demand of stable residential groups. Before the policy adjustment, individuals engaged in urban basic services or whose corporate headquarters were located outside Shanghai might have been ineligible to purchase homes due to not having paid social insurance in Shanghai. The new &#34;seven policies&#34; are aimed at supporting the housing demand of such stable residential groups in Shanghai, allowing those with a residence permit for five years to qualify for home purchases. &#34;In other words, the previous purchase restrictions mainly considered the duration of social insurance payments, but under the new policy, it can also be linked to the duration of the residence permit,&#34; Yan Yuejin stated.
Lu Wenxi, an analyst at Shanghai Zhongyuan Real Estate, believes that the optimization of purchase restrictions in this new policy further expands the coverage and can meet diverse rigid and improvement demands. &#34;Now, as long as there is one year of social insurance, one can buy at least one housing unit, without distinguishing between inner and outer ring areas.&#34; He told reporters that the current demand for mid-to-high-end improvements is quite evident, especially for new homes or those in desirable locations, and the policy accurately releases the demand of these buyers. For non-Shanghai residents with three years of social insurance, who previously wanted to improve their housing conditions typically had to sell first before buying, now they can buy first and sell later, or even directly purchase a second housing unit
<h2>Housing Provident Fund Loans Implement &#34;Recognizing House but Not Loan,&#34; Reducing Loan Costs</h2>
To further leverage the role of the Housing Provident Fund in supporting housing consumption and meet the housing needs of contributors at different stages, the &#34;Notice&#34; also optimizes the housing provident fund policy: First, moderately increase the maximum loan amount of the housing provident fund; second, optimize the recognition of loan counts; third, expand the support scope for families with multiple children purchasing homes.
In terms of loan amounts, the new policy clarifies that the maximum loan amount for contributors' families purchasing their first home will be increased from 1.6 million yuan to 2.4 million yuan, combined with the policy of increasing the maximum loan amount for families with multiple children and purchasing green buildings (up to a maximum increase of 35%), the maximum loan amount for families in this city can reach 3.24 million yuan. The maximum loan amount for purchasing a second home will also be correspondingly increased.
Lu Wenxi analyzes that increasing the housing provident fund loan amount allows for lower loan interest rates, thereby reducing loan costs. &#34;Currently, the provident fund interest rate is much lower than commercial loans, and borrowing more from the provident fund helps alleviate loan pressure.&#34; He said that especially for first-time buyers, purchasing a &#34;starter home&#34; priced under 3 million yuan, the current maximum loan limit of 2.4 million yuan can fully meet the loan needs of first-time buyers. Coupled with previously announced preferential measures for families with multiple children and green buildings, the maximum loan amount can reach 3.24 million yuan, significantly reducing monthly payment pressure and total interest expenses. However, it should be noted that the final loan amount for homebuyers will depend on factors such as their provident fund account balance.
Regarding the optimization of loan count recognition, the new policy clarifies that for families of contributors in this city who have previously used housing provident fund loans, if they have no housing or only one set of housing, and have currently settled their housing provident fund loans, they can apply for housing provident fund loans when purchasing a home again in this city.
&#34;This indicates that the conditions for housing provident fund loans in Shanghai have been further relaxed, implementing 'recognizing house but not loan.'&#34; Yan Yujin believes that before the new policy, if the number of provident fund loan usages reached two, subsequent home purchases would not be eligible for provident fund loans. After the new policy, as long as there is no housing or only one set of housing, and the provident fund has been settled, the right to continue enjoying provident fund loans remains. &#34;This allows more families looking to upgrade their housing to receive support from the provident fund loans, promoting the release of demand for improved housing.&#34; He said.
The new policy also expands the applicable scope of housing provident fund loans for families with multiple children from purchasing the first home to purchasing the second home, meaning that for families with multiple children purchasing a second home, the maximum loan amount will be increased by 20% on top of the city's maximum loan amount. &#34;The second home aligns with the first home, and the new provident fund loan policy will cover more families seeking improvements, further releasing diverse demands.&#34; Lu Wenxi stated.
<h2>Personal Property Tax Policy More Humanized, Reducing Holding Costs for Relevant Groups</h2>
To support residents' needs for upgrading their housing, the &#34;Notice&#34; stipulates that starting from January 1, 2026, for children of resident families in this city who become adults, if the purchased housing is the only housing of the adult child's family, personal housing property tax will be temporarily exempted. That is, for buyers who, while minors (or before the pilot of personal housing property tax in this city), already jointly owned housing with their parents or (grand) parents, after purchasing or upgrading housing in this city, if that housing still belongs to the adult child's family as the only housing (excluding the aforementioned jointly owned housing), personal housing property tax will be temporarily exempted
&#34;The implementation of personal housing property tax is more humane.&#34; Lu Wenxi believes that previously, some buyers had to pay property tax when purchasing new housing after their children reached adulthood, even though it was the only family home, which had a certain impact on releasing new demand. This policy optimizes and improves the objective problems encountered in reality, reducing the concerns and holding costs for relevant groups regarding property ownership.
<h2>Further releasing reasonable demand and consolidating the stable and improving trend of the real estate market</h2>
What impact will the introduction of this new policy have on the subsequent market trend?
Yan Yujin believes that the &#34;New Seven Measures&#34; policy fully reflects Shanghai's comprehensive measures, city-specific policies, and the effective integration of stock and incremental policies, characterized by a wide coverage and precise measures. Overall, it reflects further support for various housing demands, especially including the balance of work and residence, livable housing, and improvement of rigid demand. While continuously reducing the cost of home purchases, it will further promote the active release of housing consumption demand and balance supply and demand, consolidating the current stable and improving trend of the real estate market.
&#34;Considering that the current market adjustment is basically in place, housing price stabilization expectations are gradually strengthening, and various favorable policies are overlapping, we believe that while promoting active transactions in various sub-markets, this new policy will also promote the healthy cyclical development between markets, especially facilitating the smoothness of the replacement chain,&#34; Yan Yujin said. For example, non-Shanghai residents now only need to meet 1 year of social security to purchase housing within the outer ring, and the pace of entering the market is expected to accelerate. &#34;If they purchase a second-hand house, it will drive the landlord to list their property for sale and replacement, and also promote the destocking of the new housing market. Accordingly, a more positive and interactive cyclical mechanism will be formed between markets, effectively promoting the stable and healthy development of the real estate market.&#34;
In Lu Wenxi's view, the introduction of this new policy can further release reasonable home-buying demand, promoting a more stable trend for Shanghai's real estate market throughout the year. &#34;I believe that Shanghai's real estate market has had a good start this year, combined with previous measures such as the pilot program for relocation and resettlement housing tickets and state-owned enterprises purchasing second-hand houses, the subsequent trend will be more solid. Behind the steadily released transaction volume, housing prices are expected to quickly emerge from the bottom.&#34; He said that the orderly advancement of policies and stable implementation are expected to further solidify the positive trend in the market, helping the real estate market to accelerate its realization of stable and healthy development.
Source: The Paper

02846

510030

000300

000008

159263

159768

399249

Non-Hu registered social security holders can purchase housing within the outer ring after one year; the maximum loan amount for the housing fund is 3.24 million, and the policy of "recognizing the house but not the loan" is implemented; specific first-time homebuyers are temporarily exempt from property tax. The new policy directly addresses the pain points of work-life balance, livability, and the improvement of rigid demand, significantly reducing the costs of buying and replacing homes, promoting the active release of housing consumption demand and balancing supply and demand, thereby consolidating the current stable and improving trend in the real estate market

Wallstreetcn

ISHARESCSI300

Fortune SG SSE 180 Value ETF

CSI 300

Conglomerates Index

E Fund CNI Value 100 ETF

Yinhua CSI Interior Real Estate Theme ETF

What benefits do the new policies bring for homebuyers? What impact do they have on market trends? Experts interpret Shanghai's real estate "New Seven Measures"