Over 60 local governments introduced new housing fund policies in the first quarter. Is the real estate market trend changing?

New housing fund (public provident fund) reform policies across various regions are being rolled out in quick succession, becoming an important lever for stabilizing the real estate market.

Starting April 1, Hangzhou officially implemented its new housing fund policy, significantly raising the maximum housing fund-backed loan amount to 1.8 million yuan; on March 31, Hainan clarified that contributors may withdraw housing fund for supporting their children in purchasing their family’s first home; on March 24, Chengdu issued a policy stating the phased cancellation of restrictions on the number of times housing fund loans can be used—if the contributor has no outstanding housing fund loans, they may apply; on February 25, Shanghai raised the maximum housing fund loan amount from 1.6 million yuan to 2.4 million yuan, and when combined with the upward adjustment (top-up) policy, the maximum loan可 be as high as 3.24 million yuan……

Data from the China Index Academy shows that in the first quarter, provinces and cities (counties) across China introduced more than 60 housing fund-related policies, accounting for nearly 38% of the total frequency of local real estate-related policies, making it a core focus of efforts to optimize local real estate policies. Increasing loan limits, optimizing the recognition of loan usage次数, expanding the scope of permissible withdrawals, and improving contribution policies are the main optimization directions of these new housing fund reforms. In addition, in the first quarter, localities also introduced around 100 related policies centered on activating homebuying demand, reducing inventory, and revitalizing existing stock, as well as focusing on optimizing restrictive policies, issuing homebuying subsidies, improving supporting policies for urban renewal, and optimizing policies related to affordable housing.

Under the dual effects of policy support and market repair after the Spring Festival holiday, key cities saw a temporary rebound in transactions in March. Data from Centaline Rui (CRIC) shows that in March, the contracted new home sales area in 50 key cities rose to 11 million square meters, a sharp 89% increase month over month. China Index Academy data shows that in March, secondhand residential transactions in 20 cities reached 148k units, up 119% month over month; after the Spring Festival, the number of secondhand home transactions has been rising month over month for five consecutive weeks. However, the overall real estate market is still in a adjustment phase, and there are noticeable differences between cities with different development tiers.

In the view of interviewed experts, on the demand side next, localities are expected to strengthen housing support for first-marriage-and-first-childbearing families and families with multiple children, continue to deepen housing fund system reforms, and core cities are expected to further optimize restrictive policies.

New housing fund reform policies rolled out densely

Recently, Hangzhou’s housing fund reform policy “Eight Provisions of Hangzhou” was officially released, covering multiple areas including raising the maximum loan amount and loan-to-value multiplier, increasing preferential benefits related to the upward adjustment of the loan amount, optimizing the recognition of the number of housing loans, adding support for withdrawing housing fund to pay home purchase deed taxes and property fees, relaxing time limits for withdrawing housing fund to build or purchase homes, and expanding the scope for intergenerational mutual assistance withdrawals within families—among other measures. The policy strength is prominent.

Under the new policy, Hangzhou’s maximum housing fund-backed loan amount rises from 1.3 million yuan to 1.8 million yuan, and the maximum amount that individual employees can borrow is 900k yuan. At the same time, the calculation multiplier of the individual employee’s borrowable amount is adjusted from 15 times to 20 times, and a 20% upward adjustment is added for cases involving new urban residents and young people’s families. For families with multiple children, the upward adjustment proportion for the loan amount is increased from 20% to 50%. The benefit of the upward adjustment is not subject to the number of times; different types of upward adjustments can be selected to stack, with the maximum cumulative upward adjustment proportion at 70%, reaching 3.06 million yuan.

Regarding the recognition of the number of loan units, “Eight Provisions of Hangzhou” clearly states that when a staff member’s household applies for a housing fund loan to purchase their first or second self-occupied home, if the home purchased using a previous housing fund loan has already been sold, the number of loan times can be correspondingly reduced.

Zhang Shangguan, president of the Shell (Beike) Research Institute in Hangzhou, told a reporter from 21st Century Economic Herald that, according to Shell Hangzhou station data, since last year, about 29.8% of housing sale and purchase deals used housing fund loans, and the share of deals using only housing fund loans increased from 6.6% in January last year to 10.7% currently. Looking at newly signed deals since this year, the shares for deals within 2 million yuan and within 3 million yuan are 57.5% and 76.9%, respectively. After the new policy takes effect, in the future, most households in Hangzhou are expected to significantly reduce the financial pressure of purchasing a home by using housing fund loans.

Expanding the scope for housing fund withdrawals and their usage is also an important highlight of this Hangzhou new policy. It newly supports withdrawing housing fund to pay home purchase deed tax, as well as property fees for self-occupied homes in Hangzhou—this is also the first time Hangzhou has included property fees within the scope of housing fund withdrawals. Meanwhile, the scope for intergenerational mutual assistance withdrawals within families is expanded—from previously only between the homebuyer’s immediate relatives—to cover the spouse, both parents, children, and the spouses of the contributing employees.

Shangguan believes that this housing fund policy reform in Hangzhou reflects precise support for different categories of housing demand, especially focusing on core needs such as young people setting up households, first-time demand, and “improving demand” (upgrading to better housing). Issuing the policy at the key moment of the “early spring” season, combined with Hangzhou’s existing variety of relaxed policies, will help further release all kinds of homebuying demand.

As a typical representative of recent housing fund reforms across different regions, “Eight Provisions of Hangzhou” has strong demonstration significance in terms of policy strength and coverage. According to China Index Academy data, in the first quarter, more than 60 housing-fund-related policies were introduced across China, the highest share among various real estate policies, and about half of them were rolled out in March. Raising housing fund loan limits, optimizing the number of times housing fund loans are withdrawn, and expanding the scope for withdrawals and usage have become the main landing points for policy optimization across regions.

With new policies continuing to follow through, on February 25, Shanghai raised the maximum housing fund loan amount from 1.6 million yuan to 2.4 million yuan; combined with the upward adjustment policy, the maximum loan can reach 3.24 million yuan. On March 24, Chengdu phased out restrictions on the number of times housing fund loans can be used; if there is no outstanding housing fund loan under the applicant’s name, they can submit an application. On March 31, Hainan clarified that contributors may withdraw housing fund to support their children in purchasing their family’s first home.

“Adjustments to housing fund policies have become a direct and effective policy tool for local governments to support first-time demand groups in lowering home purchase costs and stabilizing market expectations, and the pulling effect on first-time demand groups is especially evident,” Zhang Bo, president of the 58 Anjuke Research Institute, told a reporter from 21st Century Economic Herald.

In addition to supporting home purchases, local governments are also continuously expanding the scenarios where housing fund can be used.

On March 31, Anhui Province’s Housing Provident Fund Management Branch for the province’s directly administered institutions introduced a new policy, clarifying support for withdrawing housing fund to pay property fees, personal expenses for housing renovation under urban renewal, home purchase deed tax, and special maintenance funds for residential properties, and expanding the scope for major illness withdrawals. Chengdu’s housing fund reform further increases support for major illness withdrawals: if a contributor, their spouse, parents, or children are diagnosed with a major illness, they may apply to withdraw all available balances in the housing fund account to pay medical expenses, and the withdrawal frequency is not restricted. At the same time, it also supports withdrawing housing fund to purchase parking spaces, with the total amount withdrawn for each parking space capped at no more than 100k yuan.

Zhang Bo said that the implementation of housing fund policies in core cities will play a bigger role in repairing market expectations, helping homebuyers shift from watching and waiting to taking active steps to enter the market, and improving overall market activity. From a macro perspective, the housing fund policy optimization represented by Hangzhou in this round is, in essence, the launch of a systematic reform of the housing provident fund system in the context of a new real-estate cycle. Policies are accelerating the transformation toward a model that supports both renting and buying, and full-cycle housing security. Measures such as expanding withdrawal scenarios, enabling mutual assistance among relatives, enabling nationwide “handled in one place” services, and expanding contributions by flexible employed persons are being advanced in parallel.

March transactions in key cities surged year-over-year

Including housing fund-related policies, local governments issued roughly 160 real estate market policies in the first quarter. In addition to housing fund policies, optimizing restrictive policies, issuing homebuying subsidies, advancing the construction of “good homes,” and accelerating urban renewal are also important directions for policy optimization since the beginning of this year.

In terms of optimizing restrictive policies, on February 25, Shanghai issued a document to further reduce housing purchase restriction policies. The required years of paying social insurance or individual income tax for non–Shanghai residents to buy housing within the Inner Outer Ring Road (inside the outer ring) were shortened to more than 1 year; at the same time, it supported qualified non–Shanghai residents to purchase an additional home within the Outer Ring Road area (i.e., buy one extra unit). It also clarified that groups meeting the conditions with Shanghai residence permits may purchase homes in Shanghai. With this new policy taking effect, the size of the demand group for housing within the Outer Ring Road area in Shanghai is directly expanded, promoting a more fine-grained release of homebuying demand.

In terms of issuing homebuying subsidies, recently, six districts in Hangzhou—Gongshu, Xiaoshan, Yuhang, Linping, Qiantang, and Lin’an—have intensively launched homebuying subsidy policies or “homebuying + consumption voucher” subsidy policies, with a maximum subsidy of 100k yuan per unit. Some areas also stack group-buying discounts. Since this year began, Nanjing has also clarified a talent housing ticket subsidy baseline: those with a college diploma or above can enjoy subsidies, with standards ranging from at least 30k yuan to at least 150k yuan. On top of that, each district further increased subsidy intensity.

In addition, this year many cities are accelerating the rollout of supporting policies for urban renewal. Many regions have issued medium-to-long-term action plans for urban renewal or five-year special plans. Cao Jingjing, general manager of the Index Research Department at the China Index Academy, told a reporter from 21st Century Economic Herald that implementing these supporting policies helps lower enterprise development thresholds, simplify approval procedures, speed up the implementation of urban renewal projects, and further energize urban development.

Driven by a series of policies, after the Spring Festival holiday, real estate markets in many places have shown a recovery trend. Data from the Beijing Municipal Commission of Housing and Urban-Rural Development shows that in March, Beijing’s secondhand residential online contract volume reached 19,886 units, up 144.6% month over month and up 3.4% year over year, reaching the highest level in nearly 15 months. Data from the Shanghai Lianjia Research Institute shows that in the same period, Shanghai’s secondhand home transaction volume was 31k units, up 37% compared with January this year and up 6% year over year.

Looking at a wider scope, among the 20 cities monitored key by China Index Academy, secondhand residential transactions reached 148k units in March. After the Spring Festival, the transaction volume has risen month over month for five consecutive weeks. In the fourth week of March (March 23–29), the transaction volume reached a weekly new high since 2025. The new home market is also performing well. CRIC data shows that in March, the contracted new home sales area in 50 key cities rose to 11 million square meters, up 89% month over month.

However, the large month-over-month increase in March is also affected by the relatively flat market performance in February due to the Spring Festival holiday. Overall, the real estate market is still in an adjustment phase. According to China Index Academy data, the contracted new home sales area in March in 30 key cities fell 7% year over year, and in the first quarter it fell 21% year over year. In March, the number of secondhand home transactions in 20 cities fell 2.5% year over year, and in the first quarter it fell 4.1%. The foundation for market recovery still needs to be further consolidated, and the market will need ongoing policy support to stabilize and rebound.

The government work report this year clearly states that efforts should focus on stabilizing the real estate market. Adopt measures tailored to local conditions to control incremental supply, reduce inventory, and improve supply quality; explore multiple channels to revitalize existing stock commercial housing; encourage the acquisition of key existing commercial housing to be used primarily for affordable housing. Deepen the reform of the housing provident fund system. And deploy actions around optimizing the supply of affordable housing, promoting the construction of “good homes,” resolving risks of corporate real estate developers’ debt, and developing new models for real estate development.

Zhang Bo believes that in the short term, there is still room to optimize restrictive policies in first-tier cities. Adjustments may be made dynamically in line with market transaction performance and inventory-depletion progress, continuing to precisely loosen restrictions in areas such as purchase limits, loan limits, and resale limits, with a focus on supporting rational first-time demand and improvement-driven demand. Local governments will also seize key consumption windows such as the May Day holiday, intensify policy support in a concentrated manner, and combine it with promotional activities from real estate developers to create a policy-market resonance effect. At the same time, measures such as government storage acquisition of existing commercial housing and promoting home exchanges “from old to new” will accelerate implementation. On the one hand, they will effectively digest inventory and optimize supply-demand structure; on the other hand, they will connect the circulation chain between secondhand and new homes, truly stabilize market expectations, boost confidence in homebuying decisions, and help the market stabilize and rebound as soon as possible.

Looking toward the “15th Five-Year Plan and beyond” period, Cao Jingjing believes that combining housing policies with population policies will become an important direction. First-marriage-and-first-childbearing families and families with multiple children are expected to become key groups supported by policy. Continuing to optimize housing provident fund policies remains an important lever for strengthening housing security. Policies on the supply side will continue the approach of controlling incremental supply, reducing inventory, and improving supply quality, and supporting complementary policies such as revitalizing existing stock and urban renewal are expected to be implemented faster.

(Author: Li Sha; Editor: Li Bo, Zheng Wei)

(Editor: Wen Jing)

Keywords:

                                                            Housing provident fund