From lowering home purchase thresholds to reducing mortgage interest burdens, from establishing quality housing standards to accelerating inventory digestion—Chinese authorities have rolled out a comprehensive policy package this year to stabilize the property market. Local governments across China have actively optimized real estate policies through targeted measures, maintaining overall market stability.
Interest Rate Reductions Ease Buyer Burden
Following this year’s first reduction in the Loan Prime Rate (LPR) in May, major banks in Beijing, Shanghai and other first-tier cities quickly adjusted their mortgage rates, with some first-home loan rates dropping to 3.05%.
The policy benefits have tangibly reduced buyer costs. At Shanghai’s Bund 98 project by Poly Developments, all units sold out on opening day on May 27. Ms. Yang, who initially planned to purchase a 100-square-meter apartment with cash, ultimately chose a 130-square-meter unit after considering the lower mortgage rates. “The interest rate cut gave me the confidence to proceed,” she said.
Policy Effects Stabilize Market Transactions
Li Yujia, chief researcher at the Guangdong Housing Policy Research Center, noted that May’s rate cuts injected market confidence while local governments optimized policies on both supply and demand sides. “These measures facilitate demand realization and promote circulation between new and existing homes,” Li explained.
The policy impact is evident in transaction volumes. At a Beijing Homelink signing center on May 30, all 12 negotiation rooms were occupied. “We’re averaging about 40 weekend transactions for existing homes in May—steady growth,” said center manager Shi Xianchao.
Prospective buyer Ms. Yang found a suitable two-bedroom apartment in Beijing’s Anhuili neighborhood, benefiting from both lower downpayment requirements and an increased provident fund loan limit of 400,000 yuan for her two-child household. “The combined loan monthly payment of about 8,100 yuan is affordable and meets our housing needs,” she said.
Local Governments Implement Targeted Support
Throughout May, cities including Zhuhai, Changchun, Chengdu, and Suzhou optimized housing provident fund policies, while others like Foshan and Zhuzhou introduced purchase subsidies. These measures have produced positive effects—national statistics show new home sales in 40 major cities grew 0.1% year-on-year in January-April.
According to China Index Academy data:
- Shenzhen and Guangzhou saw new home sales grow 41% and 24% respectively January-May
- Beijing and Shanghai existing home transactions rose 23% and 34%
- Shanghai’s May new home sales increased both monthly and annually
Inventory Digestion Gains Momentum
Addressing housing inventory has become a key stabilization measure. Zhejiang province issued China’s first special bonds for purchasing existing homes, while Jiangsu implemented housing voucher programs. In Nanjing alone, 11,000 housing vouchers have been issued, directly digesting over 6,200 inventory units.
Dr. Cai, a Nanjing professional, utilized the city’s talent housing voucher to receive 614,000 yuan in subsidies. “The voucher covered our downpayment for a 130-square-meter home, leaving manageable mortgage payments,” he said.
Quality Housing Initiatives Expand
Following national quality housing standards, local governments are implementing upgraded technical requirements:
- Beijing launched pilot projects for high-quality new homes and urban renewal
- Shandong introduced 11 supporting measures including premium land supply
- Hangzhou encouraged design innovations like higher ceilings and flexible layouts
Industry Outlook
Market analysts highlight that the coordinated demand-and-supply side policies continue injecting momentum into the property sector. These measures not only promote stable market development but also lay the foundation for high-quality industry growth.
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