Shanghai Unveils Real Estate 'Eight Measures' Easing Policy: Lowering Down Payments for Second Homes and Subsidizing 'Old-for-New' Purchases

On Thursday (August 20), Shanghai jointly issued the 'Notice on Optimizing Local Real Estate Policies' with six departments, including the Housing and Urban-Rural Development Commission and the Finance Bureau, officially introducing five aspects and eight new real estate policies collectively known as the 'Eight Measures for Hu.' These measures will take effect starting August 21. This marks another first-tier city, following Beijing, to ease housing market restrictions.

Following the announcement, mainland Chinese real estate stocks surged in the afternoon session. Individual stocks such as Chengtou Holding rose sharply, hitting their daily trading limits.

The core of the 'Eight Measures for Hu' focuses on lowering homebuying barriers and facilitating second-hand property transactions. Regarding personal housing loans, for individuals purchasing a 'second home' outside the Outer Ring Road, the minimum down payment ratio for standard commercial mortgages has been reduced from the previous 'not less than 20%' to 'not less than 15%.' Currently, the minimum down payment ratio for first homes is uniformly set at no less than 15%. For second homes, regional differences remain: a minimum of 25% inside the Outer Ring, while outside (including all of Baoshan and Jiading districts) it has been lowered to 15%.

To promote 'old-for-new' replacement demand between second-hand and new homes, a phased home purchase subsidy will be available until March 31, 2027. Households that purchase a new commercial residential unit outside the Outer Ring, complete online contract registration, and sell their existing second-hand home within one year before or after registration, will receive a subsidy equal to 1% of the new home's mortgage amount (capped at RMB 50,000 per unit). If the sold second-hand home is located inside the Outer Ring, an additional RMB 30,000 subsidy can be applied for, allowing a maximum combined subsidy of RMB 80,000.

Additionally, the new policy further optimizes housing provident fund (home purchase savings) withdrawal rules. It expands the scope of down payment withdrawals from pre-sold units to 'ready-built new commercial residences,' continues to support the 'withdraw-then-loan' model (allowing provident fund withdrawals without affecting loan eligibility), and relaxes withdrawal frequency for those who haven't taken out a provident fund loan—from once every five years to once per calendar year—and allows funds to be used for paying deed tax, purchasing parking spaces, and storage rooms.

The policy also clearly promotes 'housing voucher resettlement' in land expropriation and demolition projects and includes plans for central urban districts to acquire second-hand homes as guaranteed rental housing.

Regarding this policy adjustment, Morgan Stanley China's Chief Economist Xing Ziqiang expressed an optimistic outlook, stating that China's real estate adjustment has entered its sixth year. Compared with historical global real estate cycles, the downward correction phase is likely nearing its end, and the market is not far from stabilizing and recovering.