Shanghai Eases Homebuying Rules in Core Districts to Stem Property Slump

1. Shanghai has significantly eased restrictions for non-residents seeking to purchase homes in its central districts, aiming to reinvigorate the city’s sluggish property market. This represents a notable relaxation of one of the strictest regulatory environments for home purchases in China’s top-tier cities, specifically targeting demand-side stimulus as policymakers seek to counteract a multi-year downturn in the property sector that has impacted the broader economy. [para. 1][para. 4]

2. Starting Thursday, non-Shanghai residents are now required to present proof of social security or individual income tax payments for only one consecutive year—down from the previous three years—to buy a home within the prestigious Outer Ring Road area. Furthermore, non-residents with three years of social security payments can now buy a second home in these core districts. Those holding a Shanghai Residence Permit for five years are exempt from providing social security or tax proof to purchase one property anywhere in the city. [para. 2][para. 3]

3. In the past, Shanghai had some of China’s tightest property purchase limits. Non-resident families, for instance, needed five consecutive years of social security or tax payments to buy a home, while single non-residents couldn’t buy in restricted areas even if they met the criteria. These rules created a very high barrier for non-residents. The latest changes mark a substantial relaxation, especially for high-demand urban core areas inside the Outer Ring, reducing the entry threshold for non-resident buyers. [para. 5][para. 8]

4. Facing a serious downturn in the real estate sector during 2023, national regulators had previously been reluctant to loosen restrictions in tier-one cities. However, in January 2024, the Ministry of Housing and Urban-Rural Development signaled a more flexible approach, giving cities greater policy autonomy. Shanghai responded with a phased series of policy updates: in January 2024, purchase limits were lifted for single non-residents outside the Outer Ring, followed by further adjustments in May, August, and September. By August 2025, non-residents meeting the one-year social security rule could buy multiple homes in areas outside the urban core. [para. 6][para. 7]

5. The announcement aligns Shanghai with similar moves in other major cities; for example, Beijing reduced the required years of social security contributions for non-residents to purchase homes within its Fifth Ring Road to two years, and to one year for properties outside the ring as of December 24, 2025. [para. 10]

6. A report from the China Index Academy highlights that Shanghai’s policy change fits a pattern of targeted, incremental easing, and is expected to directly expand housing demand in the city center. Industry insiders cite a still-divided market: sales and prices for new homes are down, while the secondary (resale) market is becoming more active. New projects have an average sell-through rate of about 30%. [para. 9][para. 13]

7. As a further effort to stabilize the market, Shanghai recently launched a pilot program to acquire existing homes and convert them into affordable rental housing. The government’s goal is to absorb older housing stock, thus stabilizing both prices and market sentiment. However, experts remain uncertain about the new policies' impact, noting that previous easing measures only gave a temporary boost, typically lasting around a month. [para. 14][para. 15][para. 16]

8. Alongside relaxed purchase restrictions, Wednesday’s announcement also introduced adjustments to housing finance: the maximum Housing Provident Fund loan for first-home buyers increased from 1.6 million to 2.4 million yuan (around $347,000), and up to 3.24 million yuan for families with multiple children buying green-certified homes. Fund eligibility now also covers second homes and introduces a “recognize home, not loan” rule for families using the fund again. These steps are designed to make purchasing more accessible and affordable. [para. 18][para. 19]