Zhongjin: Shanghai to reduce restrictions on housing purchases, policy coordination may help stabilize housing prices locally.

Zhongjin released a research report stating that on February 25, 2026, five departments in Shanghai jointly issued the "Notice on Further Optimizing and Adjusting the City's Real Estate Policies", further reducing housing purchase restrictions and optimizing housing provident fund loan policies, and improving individual property tax policies. The supply and demand structure of housing in some top cities has shown positive changes, and policy coordination may accelerate the stabilization of local housing prices. If the trend of stabilization in local housing prices becomes more certain, the real estate sector may gradually shift from the policy game since the beginning of January to a beta market under the coordination of fundamentals. Depending on the degree of risk preference of investors, there are three investment strategies: 1) allocate stable targets with obvious beta features; 2) allocate structural growth targets in real estate development; 3) some private enterprises return to the "table" and achieve substantial revaluation under oversold valuation. The main points of Zhongjin are as follows: Shanghai relaxes non-Shanghai residents' home purchase restrictions, optimizes housing provident fund loans, and personal property tax policies. This adjustment in Shanghai's home purchase restrictions involves three types of non-Shanghai residents: 1) non-Shanghai residents who have paid social security or personal income tax continuously for 12 months can now buy 1 house within the outer ring instead of 0; 2) non-Shanghai residents who have paid social security or personal income tax continuously for 36 months can now buy 2 houses within the outer ring instead of 1; 3) non-Shanghai residents without proof of social security or personal income tax who have had a residence permit for 5 years can now buy 1 house in the entire city instead of 0. Shanghai has also increased the maximum housing provident fund loan amount and allows residents who have repaid their housing provident fund loan and do not own a house or only own 1 house to reapply for a housing provident fund loan. The maximum housing provident fund loan amount for families with more than one child can be increased by 20%. In addition, the shared housing between Shanghai residents' adult children and parents or grandparents is not counted towards their family's property tax count after the children reach adulthood. The supply and demand structure of housing in some top cities has shown positive changes, and policy coordination may accelerate the stabilization of local housing prices. Recently, the time taken for second-hand housing to be listed and sold in some top cities like Beijing and Shanghai has been gradually reduced to the range where historical prices tend to be stable. The main driving factor is the continuous decline in the amount of existing listings due to fewer new listings and more delistings, rather than a temporary increase in transaction volume driven by policies, which may indicate that the social inventory liquidation is near completion and there is a basis for price stabilization. Furthermore, continued targeted efforts on the policy side might accelerate the process of stabilizing local housing prices, including but not limited to measures directly addressing inventory issues such as the emphasis on "de-stocking" at the Central Economic Work Conference, Shanghai's second-hand housing acquisition pilot program, as well as demand-boosting measures such as Beijing's home purchase restrictions adjustment, second-hand housing transaction value-added tax and personal income tax incentives, and Shanghai's home purchase restriction adjustment. We estimate that Beijing and Shanghai together contribute 30% of the national second-hand housing transaction amount and 10% of the new housing transaction amount, and stabilizing housing prices in top cities will help stabilize the foundation of the national housing market. Focus on investment opportunities in the real estate sector. If the trend of stabilization in local housing prices becomes more certain, the real estate sector may gradually shift from the policy game since the beginning of January to a beta market under the coordination of fundamentals. Depending on the degree of risk preference of investors, there are three investment strategies: 1) allocate stable targets with obvious beta features; 2) allocate structural growth targets in real estate development; 3) some private enterprises return to the "table" and achieve substantial revaluation under oversold valuation. Risk warning: Regional second-hand housing inventory may increase due to external shocks; the volume of new residential land exceeds expectations.