Exclusive: Shanghai, Shenzhen to Lift Home Purchase Restrictions in Bid to Revive Property Market

Shanghai and Shenzhen, two of China’s most prominent cities, are poised to eliminate key restrictions on home purchases, marking a significant escalation of efforts to revitalize the nation’s struggling property market. According to sources familiar with the matter, these major metropolitan areas plan to abolish remaining eligibility requirements and purchase limits, aiming to attract buyers and stabilize the sector.

Under the proposed changes, potential buyers will no longer face stringent eligibility criteria, and individuals from other regions of China will be allowed to purchase homes in these sought-after cities. Previously, restrictions targeting non-local buyers, aimed at curbing speculation and controlling prices, had been in place for over a decade. The planned easing also includes scrapping limits on the number of homes individuals can purchase.

Shanghai and Shenzhen are expected to announce these changes in the coming weeks, joining a growing number of Chinese cities that have completely removed purchase restrictions over the past year to stimulate demand in the crisis-hit property market.

The move comes as China’s leadership has pledged to bolster economic growth and address the ongoing downturn in the real estate sector, a key driver of the economy. This easing of home purchase restrictions follows recent announcements of broader monetary stimulus and property market support measures by the central bank, including interest rate cuts and liquidity injections.

The potential impact of these changes was evident in the stock market, with China’s CSI 300 Real Estate Index surging following reports of the planned easing.

Key Takeaways:

• Shanghai and Shenzhen plan to lift key remaining restrictions on home purchases.
• The changes include abolishing eligibility requirements, lifting purchase limits, and allowing non-local buyers.
• These moves follow recent monetary stimulus and property market support measures by the central bank.
• The easing of restrictions signals a significant escalation of efforts to revive China’s struggling property market.

This decision underscores the urgency with which Chinese authorities are addressing the property market crisis, which has weighed heavily on economic growth and consumer confidence. The effectiveness of these measures in stimulating demand and stabilizing the sector remains to be seen, but they signal a bold move by the government to address a critical economic challenge.