The "Shanghai Seven Policies" are taking effect: the number of viewings arranged by agents has doubled compared to the previous period, and some buyers made offers on the same day as the new policies were announced.

Two days after the implementation of Shanghai’s “Seven Policies,” the market has quickly heated up: on February 25, the number of second-hand property viewings surged by 122% week-on-week, new property viewings increased by 106%, and online consultations rose by 81% (second-hand) and 156% (new properties) compared to the daily average in January. The new policies focus on easing purchase restrictions (reducing social security or tax payment requirements within the outer ring to 1 year), increasing housing provident fund limits, and expanding property tax exemptions, effectively stimulating both first-time buyers and improved housing demand. Frontline feedback indicates increased willingness among clients to enter the market, hesitant buyers are accelerating decisions, some owners are beginning to raise listing prices, and signs of a “small spring” market are emerging.

The effects of Shanghai’s “Seven Policies” are beginning to show.

On February 25, the Shanghai Municipal Housing and Urban-Rural Development Management Committee, the Municipal Housing Management Bureau, the Municipal Finance Bureau, the Municipal Taxation Bureau, and the Municipal Housing Provident Fund Management Center jointly issued the “Notice on Further Optimizing and Adjusting the City’s Real Estate Policies” (hereinafter referred to as “Seven Policies”), which relaxes purchase restrictions, raises the quota for housing provident fund loans, and temporarily expands property tax exemptions, among other measures. The policies took effect on February 26. Just two days after implementation, market activity has significantly rebounded.

“These new policies focus on lowering the barriers to homeownership, reducing housing costs, and supporting reasonable housing needs,” said Yan Yuejin, Deputy Director of the Shanghai E-House Real Estate Research Institute. Given the overall positive trend in the real estate market in the first two months of this year, such incremental policies are expected to have a positive effect.

Regarding purchase restrictions, the new policies specify that non-Shanghai residents’ social security or individual tax payment periods within the outer ring are shortened from 3 years to 1 year; non-Shanghai households or single adults with 3 years of social security can purchase an additional property within the outer ring; those with a residence permit for 5 years or more can buy a property without social security proof. Additionally, the quota for housing provident fund loans is increased, green building projects’ loan limits are raised, and the scope of property tax exemptions is slightly expanded, providing comprehensive support for both first-time and improved housing buyers.

Although the policies have only been in effect for a short time, market activity is already evident. According to Lianjia Research Institute in Shanghai, influenced by the “Seven Policies,” recent market activity has significantly increased, and housing demand has been effectively released. Data from Lianjia shows that on the day the policies were announced, February 25, the daily active users of the Beike/Lianjia app increased by 36.8% compared to February 24; second-hand property viewings rose by 122%, and new property viewings increased by 106%. Compared to the average daily levels in January, on February 25 and 26, the daily active users of the Beike/Lianjia app increased by 42.8%, online consultations for second-hand properties rose by 81%, and for new properties by 156%.

Li Gen, head of Lianjia Research Institute in Shanghai, believes that with the continued influx of people returning to Shanghai, the number of property viewings is expected to maintain a steady upward trend, further consolidating the market recovery.

It is worth noting that this set of policies further expands the pool of homebuyers. Specifically, non-Shanghai residents holding a “Shanghai Residence Permit” for 5 years or more can purchase one property in Shanghai without needing to provide proof of social security or individual tax payments.

Previously, purchase restrictions mainly depended on social security payment years. For some individuals engaged in city basic services or whose company headquarters are outside Shanghai, they might have been ineligible to buy property due to lack of social security contributions in Shanghai. Under the new policies, eligibility is now linked to the length of residence permit holding.

Nian Yanpeng, a senior agent at Lianjia in Chuansha Jiangzhen, said, “Some self-employed families doing business don’t pay social security, but they have long-term residence in Shanghai and hold residence permits. After the policy relaxed, they rushed to view houses, and some clients made immediate decisions when they found suitable properties.”

He added that after the policies were implemented, clients’ willingness to buy increased significantly, and landlords’ attitudes stabilized. “Currently, overall viewings, listings, and transactions at our stores are rebounding, and signs of a small spring market are very clear. Many hesitant clients are coming back to negotiate prices and sign deals.”

A sales manager at Pacific Housing in Weifang also felt the market warming: “Compared to previous years after the New Year, buyers are more active. On the first day back at work on the 25th, we closed a deal. The client said that because of the new policies, they decided to buy instead of hesitating.”

Meanwhile, some buyers’ attitudes are also changing. For example, a property in Weifang New Village, Pudong, was originally negotiated at 1.9 million yuan before the New Year. After the policies, the owner increased the asking price to 1.99 million yuan, and their mindset is still evolving.

On the same night the policies were announced, a new housing project in the city center offered discounted units and announced “the sales office will stay open all night,” with some developers posting that the total transaction amount in Shanghai exceeded 170 million yuan within 24 hours of the policy release.

Additionally, at the Poly Duhui and Huxu sales office in Minhang Zhuanqiao, staff reported that after the new policies, overall visitor numbers increased by 30%, transactions doubled, and on the first day (February 26), six units were sold. “Some clients came to view houses on the day the policies were announced, and after just over an hour of discussion, they made a purchase. The policies have boosted clients’ confidence and sped up decision-making.”

According to these sales staff, while the policies seem to favor the outer ring on the surface, deeper analysis shows that they are not only about making housing more affordable but also about encouraging people to buy quality homes. Raising the first-time loan limit for housing provident funds, increasing green building project quotas, and expanding property tax exemptions all point toward this goal.

Source: The Paper

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