Housing Policies Spark Extended Spring Rally in China Market

China’s new housing policies, led by Shenzhen’s landmark “4.29” package, have triggered an unusually prolonged “spring rally” in the second-hand home market across major cities, with transaction volumes and prices rising simultaneously in Beijing, Shanghai, and Shenzhen. The traditional spring home-buying season has extended from March into June, marking a significant shift in market dynamics.

Policy Catalyst: The Shenzhen “4.29” Package

On April 29, the Shenzhen Housing and Construction Bureau issued Document No. 86, its most aggressive housing policy relaxation to date. The measures target core urban areas — Futian, Nanshan, and Bao’an’s Xin’an Street — previously the most tightly restricted zones in the city. Key changes include allowing resident families to purchase an additional property in these areas, granting non-hukou families with a valid residence permit the right to buy without社保/tax requirements, and significantly increasing Housing Provident Fund (HPF) loan limits.

Individual HPF loans were raised to 700,000 RMB and joint loans to 1.3 million RMB, with first-home buyers eligible for a 60% top-up and families with two or more children receiving up to a 70% increase. The policy took effect on April 30.

Shenzhen: 14-Month High in Transactions

The impact was immediate. According to CCTV News, Shenzhen recorded 10,079 combined new and second-hand residential transactions in May — the first time exceeding 10,000 units in 14 months, representing an 11.4% month-on-month and 28.4% year-on-year increase.

New home online signings surged 33.6% month-on-month to 4,545 units, while second-hand home transfers reached 5,534 units, up 18.1% year-on-year. Core area performance was particularly strong: Futian second-hand transactions rose 12% month-on-month and Nanshan jumped 17.1%. The average second-hand transaction price climbed approximately 4.6% month-on-month.

Sales Manager Zang Zhoucheng told CCTV that his project saw about 200 batches of visitors in May, a 30% increase from April, with over 50 units closed — a 50% month-on-month increase. “Since the new policy, some clients have been closing deals faster, and they tend to prefer core areas,” he said.

HPF loan usage has also shifted dramatically. Since the policy, 4,404 loans totaling 6.82 billion RMB have been processed, with the average loan amount rising 21% to 1.55 million RMB. Pure HPF loan usage climbed from 4.3% in April to 7.1% in May.

Shanghai: Six-Year High in May Transactions

Shanghai’s second-hand market posted equally impressive figures. Data from The Paper shows total second-hand transactions reached 28,023 units in May — the highest May volume in six years and up approximately 31% year-on-year. Eight individual days exceeded 1,000 transactions, with May 10 setting a nearly five-year single-day record of 1,664 transactions.

Second-hand listings have tightened significantly, falling by over 70,000 from the same period in 2025 to approximately 309,200. Zhang Bo, Dean of the 58 Anjuke Research Institute, characterized the shift as a transition from a “price-for-volume” model to a “volume-and-price stabilization” phase. “Shanghai’s second-hand transaction volume has been at a high level for three consecutive months, further confirming the market recovery signal,” Zhang said.

Song Huxiong, Director of Shanghai Centaline Property in the Senlan area, reported that weekend viewing volume increased about 30% month-on-month, while actual transaction prices in his main楼盘 area rose approximately 3% month-on-month.

Beijing: Third Consecutive Month Above 15,000 Units

Beijing’s market also demonstrated sustained strength. According to 36Kr, second-hand home online signings reached approximately 15,800 units in May, up 11.8% year-on-year and marking the third consecutive month above 15,000 units. This represents the highest May transaction volume since 2022.

National Bureau of Statistics data shows Beijing second-hand prices have risen month-on-month for three consecutive months, though they remain down year-on-year from 2025 levels — indicating the recovery is from a low base.

Analysis: A Structural Recovery

Market analysts describe the current rally as a structural recovery rather than a broad-based boom. The gains are concentrated in core urban areas of first-tier cities, while suburban and lower-tier city markets continue to face pressure. The recovery is supported by genuine demand from first-home buyers and upgraders rather than speculative investment.

Lu Wenxi, Market Analyst at Shanghai Centaline Property, noted that a rare high-premium land auction at the end of May signals developer optimism. “Based on June being the end of the first half-year, many developers will accelerate project launches, so June transactions should remain highly active,” Lu said.

What to Watch

Key questions remain about the sustainability of the rally. Historical patterns show spring rallies often fade by mid-year, and broader economic headwinds — including employment and income trends — will ultimately determine housing demand. However, the Shenzhen policy package has provided a template that other cities may follow, and the combination of policy support, tightening supply, and improving buyer sentiment suggests the recovery has momentum heading into the summer months.

The coming weeks will test whether this extended spring rally can transition into a sustained market recovery, or whether additional policy measures will be needed to maintain the upward trajectory.