On August 7, 2026, the Beijing Municipal Commission of Housing and Urban-Rural Development, along with other departments, issued a notice on further optimizing and adjusting the city's real estate policies, which includes adjustments to purchase restrictions and住房公积金 loan terms.
As Beijing, Shanghai, and Shenzhen are at a critical juncture in adjusting their supply-demand structures, the focus is on the role of this policy adjustment in guiding market expectations. Following Beijing's latest policy changes, the minimum social security contribution period for non-local households purchasing homes in core areas, as well as住房公积金 loan quotas, have been aligned with those in Shanghai and Shenzhen.
The significance of this policy adjustment lies more in guiding expectations than in directly stimulating demand. Currently, all three cities—Beijing, Shanghai, and Shenzhen—are in a phase where supply-side clearance is gradually leading to improved price expectations. In terms of progress, Shanghai is the fastest, followed by Beijing and then Shenzhen. In this delicate balance, policy-driven improvements in expectations could serve as a catalyst for the market to enter a virtuous cycle, a scenario that previous policy adjustments rarely encountered.
Of course, after a prolonged adjustment cycle and multiple rounds of policy efforts, the capital market will require further fundamental data support to build confidence. The view that a turning point in the Beijing and Shanghai housing markets is approaching, first proposed earlier this year, remains supported by the current fundamentals of leading cities, with Shenzhen now entering a similar state.
1) Although recent二手房 transaction volumes have seen seasonal declines, absolute levels remain higher than the second half of 2025, and year-on-year improvement in July suggests that market sentiment has largely been maintained, compared to a cooling trend in mid-2025.
2) All three cities have entered phases where new listings have been negative year-on-year since different points last year, while existing inventory levels have entered continuous decline since the third quarter of 2025, fourth quarter of 2025, and second quarter of 2026, respectively, indicating clear supply-side clearance.
3) The inventory turnover period for二手房 in Beijing and Shanghai has reached or fallen below the empirical range where prices can stabilize, while Shenzhen remains above this range, though the actual gap may be less pronounced than the data suggests due to expanded listing coverage.
Looking ahead, the endogenous stabilization trend in these three cities is becoming increasingly clear. The key is to observe when the qualitative shift from stabilization to recovery occurs, with both policy and time serving as potential catalysts. The real estate sector is viewed positively, as interim earnings headwinds have been somewhat alleviated, and valuations are generally low, leaving the market in a state awaiting catalysts. The new policy is expected to bring a phase of improved sentiment, but more sustained positive changes will require further support from fundamental data.
Risks include a weakening of the supply-demand structure in core cities and deterioration in sector liquidity conditions.
[Chart: History of Policy Adjustments in Beijing, Shanghai, and Shenzhen Real Estate Markets]
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