Shanghai's new property policies, including lower down payments and trade-in subsidies, boosted foot traffic and sales at new developments over the weekend, with some projects selling out entirely as buyers rushed to take advantage of policy dividends.
On Friday, authorities unveiled the package of preferential policies to further stimulate the property sector, including expanded use of housing provident funds, eased personal housing credit, trade-in subsidies, resettlement vouchers, and promotion of second-home acquisitions.
Over the first weekend following their entry into effect, the preferential policies have already shown early signs of impact, with the new-home market seeing the most visible response.
Under the new rules spelled out by the policies, the minimum down payment for buyers purchasing a second home outside the city's outer ring road has been cut from 20 percent to 15 percent for commercial mortgages. At a suburban project in the Qingpu District, this lower threshold has helped eligible buyers seal their deals.
"The new policy allows us to use our provident fund to purchase parking spaces, which really eases the financial burden. We'd been looking at this property for a while. Then the policy took effect on August 21, and we decided to take advantage of it. We secured our purchase today," said a home buyer surnamed Li.
All 64 units released by this development on Saturday were sold out that same day. Many buyers qualified for benefits including provident fund support, improved mortgage terms, and the trade-in subsidy available for new homes outside the outer ring road.
"This round of policy incentives is quite substantial. Our project is located in the West Hongqiao area, which falls outside the outer ring road. As long as buyers sell their existing home within one year of purchasing, they can claim a cash subsidy of 80,000 yuan (11,902 U.S. dollars)," said Yun Yanchun, the project director.
The new rules have also broadened the scope of provident fund usage. Buyers can now use their funds not only for pre-sale commercial housing but also for completed new homes. In addition, eligible contributors may apply the money toward home-purchase deed tax, as well as the purchase of parking spaces, garages, and storage rooms. These expanded options have drawn significant interest from potential buyers. "The provident fund loan limit has also been raised, so in a way, it gives us greater room to go for improvement properties. The broader usage scope means we can take full advantage of it, buying a parking space along with the home, all in one go," said another homebuyer surnamed Li.
"We'd already closed three deals by this morning, all from buyers upgrading to larger homes, for example, moving from two-bedroom to three- or four-bedroom units. Weekend reservations have surged. We used to get around 200 visits on a weekend; now we're seeing over 300. The new policy has boosted liquidity in the second-hand market, and that's a strong stimulus for projects like ours, which target improvement buyers," said Wang Jun, the sales manager.
Shanghai's new stimulus package boosts weekend home sales
