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

New housing fund (公积金) reforms across the country are rolling out in rapid succession, becoming an important tool for stabilizing the real estate market.

Starting April 1, Hangzhou officially implemented its new housing fund policy, significantly raising the maximum housing fund loan limit to RMB 1.8 million; on March 31, Hainan clarified that depositors may withdraw their housing fund to support their children in buying the family’s first home; on March 24, Chengdu released a policy stating that the restrictions on the number of housing fund loan times are temporarily lifted—if a depositor has no outstanding housing fund loans under their name, they may apply; on February 25, Shanghai increased the maximum housing fund loan limit from RMB 1.6 million to RMB 2.4 million, and with the upward adjustment policy on top, the maximum amount that can be borrowed is up to RMB 3.24 million……

According to data from the China Index Academy, in the first quarter, various 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, becoming a key focus for local optimization efforts. Increasing loan limits, optimizing recognition of the number of loan times, broadening the scope of allowed withdrawals, and improving deposit policies are the main directions of these housing fund reform measures. In addition, in the first quarter, localities also issued roughly 100 related policies around goals such as activating homebuyer demand, destocking inventory, and revitalizing existing stock—further focusing on areas including optimizing restrictive policies, issuing home purchase subsidies, improving supporting policies for urban renewal, and optimizing policies related to affordable housing.

With policy support and market repair after the Spring Festival, key cities saw a phased recovery in transactions in March. Data from Centaline (CRIC) shows that in March, the newly built home transaction area in the top 50 key cities rose to 11 million sq. meters, up 89% month over month. China Index Academy data shows that in March, 20 cities’ secondhand residential transactions totaled 148,000 units, up 119% month over month; after the Spring Festival, the volume of secondhand home transactions has been rising month over month for five consecutive weeks. However, the overall real estate market is still in an adjustment period, and there are clearly significant differences between cities of different tiers.

In the view of interviewed experts, on the demand side going forward, localities are expected to strengthen housing support for first-marriage and first-child families, as well as multi-child families, continue to deepen reforms to the housing fund system, and core cities are expected to further optimize restrictive policies.

Housing fund reforms roll out in rapid succession

Recently, Hangzhou’s housing fund reform policy, “the Eight Articles of Hangzhou” (“杭八条”), was officially released. It covers multiple areas, including raising the maximum loan amount and the loan multiple, increasing the upward-adjustment benefit for the loan amount, optimizing recognition of the number of loan homes, adding support for using housing fund withdrawals to pay the deed tax for home purchases and property management fees, loosening limits on the time frame for withdrawing housing fund to purchase or build homes, and expanding the scope of intergenerational assistance withdrawals among family members, among other items—highlighting the strength of the policy.

Under the new policy, Hangzhou’s maximum housing fund loan amount is increased from RMB 1.3 million to RMB 1.8 million, and the maximum amount a worker individually can borrow is RMB 900,000. At the same time, the calculation multiple for the amount a worker individually can borrow is adjusted from 15x to 20x. Additionally, new situations—such as loans for new urban residents and young families—are eligible for an upward adjustment of 20%. For multi-child families, the upward adjustment proportion for the loan amount is increased from 20% to 50%. The benefit of the upward adjustment is not subject to restrictions on the number of times; for different upward-adjustment types, borrowers can choose the higher and stack them. The maximum total upward-adjustment proportion is 70%, reaching RMB 3.06 million.

For recognition of the number of loan homes, “the Eight Articles of Hangzhou” clarifies that when a worker’s household applies for a housing fund loan to purchase their first home or second self-occupied home, if the housing purchased with the previous home housing fund loan has already been sold, the number of loan times can be correspondingly reduced.

Zhang Shangguan, director of the Hangzhou Beike Research Institute, told a reporter from 21st Century Business Herald that according to Beike Hangzhou station data, since last year, about 29.8% of housing transactions make use of housing fund loans; among them, the share of transactions that use only housing fund loans increased from 6.6% in January of last year to the current 10.7%. Looking at the number of newly signed orders since this year, the shares of transactions within RMB 2 million and within RMB 3 million are 57.5% and 76.9%, respectively. After the policy is implemented, in the future, most households in Hangzhou will be able to significantly reduce the financial pressure of purchasing a home by using housing fund loans.

Expanding the scope of housing fund withdrawals and usage is also an important highlight of this Hangzhou policy. The policy adds support for withdrawing housing fund to pay the deed tax for home purchases, as well as property management fees for self-occupied homes in Hangzhou—this is also the first time Hangzhou includes property management fees within the scope of housing fund withdrawals. Meanwhile, the intergenerational assistance withdrawal scope has been expanded from previously being limited to the direct relatives of the homebuyer to including the spouses of depositing employees, both parents of both parties, the children of depositing employees, and the spouses of the children.

Zhang Shangguan believes that this housing fund reform policy in Hangzhou reflects precise support for various types of housing demand, especially focusing on core demands such as young people settling down, first-time demand, and “first upgrade” (“just-improved”) demand. Issuing this policy at a critical juncture during the “Small Spring” period, together with Hangzhou’s existing various lenient policies, will help promote the further release of all kinds of home purchase demand.

As a typical representative of recent housing fund reform policies in various localities, “the Eight Articles of Hangzhou” has strong demonstration significance in terms of policy strength and coverage. According to China Index Academy data, in the first quarter this year, more than 60 housing fund-related policies were introduced across the country, the highest proportion among all categories of real estate policies, and about half of the policies were launched in March. Increasing housing fund loan limits, optimizing the number of times housing fund withdrawals can be made, expanding the scope of withdrawals and usage, and so on have become the main landing points for policy optimization across localities.

Local reform policies continue to be followed up. On February 25, Shanghai increased the maximum housing fund loan limit from RMB 1.6 million to RMB 2.4 million, and with the upward adjustment policy on top, the maximum amount that can be borrowed is RMB 3.24 million; on March 24, Chengdu temporarily removed restrictions on the number of housing fund loan times, and if there are no outstanding housing fund loans under the applicant’s name, they can apply; on March 31, Hainan clarified that depositors may withdraw housing fund to support their children in purchasing the family’s first home.

“Adjustments to housing fund policies have become a direct and effective policy tool for localities to support the first-time and first-need group in lowering the cost of buying homes and stabilizing market expectations. The driving effect on the first-need group is especially clear,” Zhang Bo, president of 58 Anjuke Research Institute, told a reporter from 21st Century Business Herald.

In addition to supporting home purchases, localities are also continuously expanding the scenarios for using housing fund.

On March 31, Anhui Province’s provincial-level housing fund management branch center introduced a new policy clarifying support for withdrawing housing fund to pay property management fees, personal expenses for housing renovation under urban renewal, deed tax for home purchases, and dedicated funds for the special repair and maintenance of residential buildings, and expanding the scope of withdrawals for major illnesses involving housing fund. Chengdu’s housing fund reform policy further increases support for withdrawals related to major illness: depositors themselves, their spouses, their parents, and their children who suffer major illnesses can apply to withdraw the entire available balance in their housing fund account to pay medical expenses, and withdrawal frequency is not restricted. At the same time, the policy also supports withdrawing housing fund to buy parking spaces, with the maximum total withdrawal amount for each parking space not exceeding RMB 100,000.

Zhang Bo noted that the implementation of housing fund policies in core cities will play a greater role in repairing market expectations, encouraging homebuyers to shift from waiting and watching to entering the market actively, and boosting overall market activity. From a macro perspective, the policy optimization round represented by Hangzhou is essentially the start of a systematic reform of the housing fund system into a new real estate cycle. Policies are accelerating their transformation toward supporting both renting and buying, as well as full-cycle residential security. Measures such as broadening withdrawal scenarios, inter-family assistance, nationwide processing, and expanding contributions from flexible employment workers are also being advanced in parallel.

March saw a big month-over-month jump in transactions in key cities

Including housing fund-related policies, localities issued about 160 real-estate market policies in the first quarter. Besides housing fund policies, optimizing restrictive policies, issuing home purchase subsidies,推进“好房子”建设, and speeding up urban renewal are also important directions for policy optimization this year.

In terms of optimizing restrictive policies, on February 25, Shanghai released documents to further reduce housing purchase restrictions. For residents without Shanghai household registration buying housing within the area inside the Outer Ring Road, the required years of paying social insurance or individual income tax are shortened to more than 1 year. At the same time, it supports qualified non-Shanghai residents to purchase one additional home within the Outer Ring Road area, and clarifies that people who meet the conditions and have a Shanghai residence permit can buy homes in Shanghai. The implementation of this new policy directly expands the size of the demand group for housing within Shanghai’s Outer Ring Road area, promoting more fine-grained release of home purchase demand.

In terms of issuing home purchase subsidies, in recent times, six urban districts in Hangzhou—Gongshu, Xiaoshan, Yuhang, Linping, Qiantang, and Lin’an—have densely introduced policies offering home purchase subsidies or “home purchase + consumption voucher” subsidies. The maximum subsidy is RMB 100,000 per unit; some areas also stack group-buying discounts. This year, Nanjing has also clarified a talent housing voucher subsidy benchmark, under which college degree holders and above can enjoy subsidies. The subsidy amount ranges from not less than RMB 30,000 to not less than RMB 150,000, and on this basis, each district further increases the strength of subsidies.

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

Driven by a series of policies, after the Spring Festival holiday, many local real estate markets showed a warming trend. Data from Beijing’s municipal housing and urban-rural development commission shows that in March, Beijing’s secondhand residential online contract signing volume was 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 Shanghai Lianjia Research Institute shows that in the same period, Shanghai’s secondhand home transaction volume was 31,000 units, up 37% from January this year and up 6% year over year.

Looking at a wider range, for the 20 cities monitored keyly by China Index Academy, in March, secondhand residential transactions totaled 148,000 units. After the Spring Festival, the volume of secondhand home transactions has continued rising month over month for five consecutive weeks. In the fourth week of March (March 23–29), transaction volume reached a weekly new high since 2025. The new home market is also impressive. Data from Centaline (CRIC) shows that in March, the newly built home transaction area in the top 50 key cities rose to 11 million sq. meters, up 89% month over month.

However, the big month-over-month increase in March transactions is also influenced by a relatively flat performance in February due to the Spring Festival holiday. Overall, the real estate market is still in an adjustment process. According to China Index Academy data, in March, the newly built home transaction area in the key 30 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% year over year. The foundation for market recovery still needs to be further solidified, and for the market to stabilize further, sustained policy support is still required.

In the government work report this year, it is clearly stated that efforts should focus on stabilizing the real estate market. Implement “policies tailored to local conditions” to control incremental supply, destock inventory, and improve the quality of supply; explore multiple channels to revitalize existing stock of commercial housing; encourage the acquisition of existing commercial housing to be used mainly for affordable housing. Deepen the reform of the housing provident fund system. And deployment will be made around optimizing the supply of affordable housing, advancing the construction of “good homes,” resolving corporate real estate debt risks, developing new models for real estate development, and more.

Zhang Bo believes that in the short term, there is still room to optimize restrictive policies in first-tier cities. They may be dynamically fine-tuned based on market transaction performance and destocking progress, with continued targeted easing in areas such as purchase restrictions, loan restrictions, and resale restrictions, focusing on supporting the release of reasonable first-need and improved demand. Localities will also seize key consumption windows such as “May Day” to increase policy intensity in a concentrated way, and combine it with property developers’优惠 promotion activities to create a resonance between policy and the market. At the same time, measures such as the government’s acquisition of existing commercial housing and推进“housing to trade in the old for the new” will accelerate implementation. On one hand, this will effectively digest inventory and optimize supply-demand structures; on the other, it will open up the circulation chain between secondhand homes and new homes, truly stabilizing market expectations and boosting homebuying confidence, and pushing the market to stabilize and rebound as soon as possible.

Looking toward the “15th Five-Year Plan (2026–2030)” period and beyond, Cao Jingjing believes that combining housing policy with population policy will become an important direction. First-marriage and first-child families and multi-child families are expected to become key supported groups. Optimizing housing fund policies remains an important lever for strengthening housing security. On the supply side, policies are expected to continue the approach of controlling incremental supply, destocking inventory, and improving the quality of supply; supporting policies such as revitalizing stock and urban renewal are expected to be rolled out more quickly.

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

(Editor: Wen Jing)

Key words:

                                                            Housing fund (公积金)