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) policy updates across 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, substantially raising the maximum housing fund loan amount to 1.8 million yuan. On March 31, Hainan clarified that account holders may withdraw housing fund to support their children’s purchase of their family’s first home. On March 24, Chengdu released a policy that proposes a phased abolition of limits on the number of times housing fund loans can be used: if there are no outstanding housing fund loans under the account holder’s name, they may apply. On February 25, Shanghai increased the maximum housing fund loan amount from 1.6 million yuan to 2.4 million yuan, and combined with the up-floating (interest/limit) policy, the maximum amount that can be borrowed rises to 3.24 million yuan……

Statistics from the China Index Academy show that in the first quarter, provinces and cities nationwide (including counties) issued more than 60 housing fund-related policies—about 38% of the total policy frequency related to real estate across regions—making it a core focus area for local governments to optimize real estate policies. Raising loan ceilings, optimizing how loan-use次数 is recognized, expanding the scope of permissible withdrawal and use, improving contribution (deposit) policies, and similar measures are the main directions of optimization in local housing fund policy updates. In addition, in the first quarter, in order to activate housing demand, reduce inventory, and revitalize existing stock, regions also focused on optimizing restrictive policies, issuing purchase subsidies, improving supporting policies for urban renewal, and optimizing policies related to affordable housing, among other areas—issuing roughly 100 related policies.

Under the dual effect of policy support and market repair after the Spring Festival holiday, major cities saw a phase of recovery in transaction activity in March. Data from CRIC shows that in March, the newly built home transaction area in the top 50 key cities rose to 11 million square meters, up sharply 89% month over month. China Index Academy data shows that in March, 20 cities’ secondary residential transactions totaled 148k units, up 119% month over month. After the Spring Festival, the secondary housing transaction volume has increased month over month for 5 consecutive weeks. However, the overall real estate market is still in a period of adjustment, and the differentiation among cities with different capability levels is relatively pronounced.

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

Housing fund policy updates are being rolled out in quick succession

Recently, Hangzhou’s housing fund new policy, “Hang Eight Articles” (“杭八条”), was officially released. It covers multiple aspects including increasing the maximum housing fund loan amount and its multiplier, raising loan amount up-floating benefits, optimizing how the number of mortgage/home loan applications is recognized, adding support for withdrawing housing fund to pay home purchase deed tax and property management fees, relaxing time limits for withdrawing to build or purchase housing, and expanding the scope of family intergenerational mutual-assistance withdrawals, among others—highlighting strong policy support.

Under the new policy, Hangzhou’s maximum housing fund loan amount will be raised from 1.3 million yuan to 1.8 million yuan, and the maximum amount that employees individually can borrow is 900k yuan. At the same time, the multiplier used to calculate employees’ individual borrowable amount is adjusted from 15 times to 20 times. The policy also adds a 20% up-floating circumstance for new urban residents and young people’s households. For multi-child households, the up-floating proportion for loan amounts is increased from 20% to 50%. The benefits of loan amount up-floating are not subject to limits on number of times; different up-floating types may be chosen to stack at the higher one, and the maximum cumulative up-floating proportion reaches 70%, reaching 3.06 million yuan.

In terms of how the number of loan applications is recognized, “Hang Eight Articles” clarifies that when an employee family applies for a housing fund loan to purchase a first or second owner-occupied home, if the home purchased with the previously used housing fund loan has already been sold, the number of loan times can be correspondingly reduced.

Wang Shangguan, Dean of the Beike Hangzhou Research Institute, told a reporter from 21st Century Business Herald that, according to Beike’s Hangzhou station data, since last year, about 29.8% of home sales transactions use housing fund loans; among transactions using only housing fund loans, the share rose from 6.6% in January last year to 10.7% currently. Looking at new signed transaction volumes since this year, the shares for deals under 2 million yuan and under 3 million yuan are 57.5% and 76.9%, respectively. After the implementation of the new policy, most families in Hangzhou will be able to significantly reduce the financial pressure associated with purchasing a home by using housing fund loans.

Expanding the scope of housing fund withdrawals and uses is also a key highlight of this Hangzhou new policy. It adds support for withdrawing housing fund to pay for the home purchase deed tax, as well as property management fees for self-occupied housing in Hangzhou. This is also the first time Hangzhou includes property management fees within the scope of housing fund withdrawals. Meanwhile, the scope of intergenerational mutual-assistance withdrawals for families has expanded from previously withdrawals among direct relatives of the home buyer to include the spouse of the housing fund contributor, both parents on either side, the children of the contributor, and the children’s spouses.

Wang Shangguan believes that this round of Hangzhou’s housing fund new policy demonstrates precise support for all kinds of housing demand—particularly focusing on core needs such as young people setting up a household, “just-and-necessary demand,” and “just-better” demand. Implementing this policy at a key moment in the current “small spring” period, together with Hangzhou’s existing range of relatively relaxed policies, will help further release diverse housing demand.

As a typical representative of housing fund policy updates in various localities in recent times, “Hang Eight Articles” has strong demonstration significance in terms of policy intensity and coverage. China Index Academy data shows that in the first quarter of this year, localities across the country issued more than 60 housing fund-related policies. Among various real estate policies, their share is the highest, and about half of the policies were rolled out in March. Increasing housing fund loan limits, optimizing the number of times loans can be withdrawn, expanding the scope of withdrawals and uses, and similar measures have become the main focus points of policy optimization.

Local policy updates continue 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 up-floating policy, the maximum amount that can be borrowed is 3.24 million yuan. On March 24, Chengdu phased out restrictions on the number of housing fund loan times: if there are no housing fund loans with outstanding balances under one’s name, one may apply. On March 31, Hainan clarified that account holders may withdraw housing fund to support their children’s purchase of their family’s first home.

“Adjustment of housing fund policies has become a direct and effective policy tool for local governments to support just-and-necessary demand groups in lowering home purchase costs and stabilizing market expectations, and its pull effect is especially evident for just-and-necessary demand groups,” Zhang Bo, Dean of the 58 Anjuke Research Institute, told a reporter from 21st Century Business Herald.

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

On March 31, Anhui Province’s housing fund management branch for provincial government employees issued a new policy, clarifying support for withdrawing housing fund to pay property management fees, personal expenses for housing renovation under urban renewal, home purchase deed tax, and special-purpose residential repair funds, and expanding the scope of withdrawals for major illnesses using housing fund. Chengdu’s housing fund new policy also increases support for withdrawals for critical illnesses: if the account holder, their spouse, parents, or children have major illnesses, they may apply to withdraw the entire available balance in their housing fund account to pay medical expenses, and withdrawal frequency is not restricted. The policy also supports withdrawing housing fund to buy parking spaces, with a maximum total withdrawal amount of no more than 100k yuan per parking space.

Zhang Bo said that the implementation of housing fund policies in core cities will play a bigger role in repairing market expectations, prompting homebuyers to move from watching to actively entering the market, and boosting overall market vitality. From a macro perspective, the optimization of housing fund policies represented by Hangzhou is, in essence, the launch of a systematic reform of the housing provident fund system into the new real estate cycle. Policies are accelerating their transformation toward a “rent-and-buy alongside” housing security model across the full life cycle. Measures such as expanding withdrawal scenarios, inter-family assistance, national handling (cross-region processing), and expanding coverage for flexible employed workers contributing to the fund are being advanced in parallel.

Key cities’ transactions surged month over month in March

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, advancing the construction of “good homes,” and accelerating urban renewal are also important directions for policy optimization since this year.

In terms of optimizing restrictive policies, on February 25, Shanghai released documents further reducing housing purchase limit policies. The required years of paying social insurance or individual income tax for non-Shanghai residents to buy housing within the area inside the outer ring road were shortened to more than 1 year. At the same time, support is provided for non-Shanghai residents who meet conditions to purchase 1 additional home within the outer ring. It also clarifies that people who meet the conditions and hold a Shanghai residence permit can buy homes in Shanghai. Once this new policy takes effect, it will directly expand the size of the demand group for housing within Shanghai’s outer ring area and promote more refined release of housing demand.

Regarding issuing home purchase subsidies, recently, six districts in Hangzhou—Gongshu, Xiaoshan, Yuhang, Linping, Qiantang, and Lin’an—have rolled out concentratedly policies offering home purchase subsidies or “home purchase + consumption voucher” subsidies. The maximum subsidy is 100k yuan per unit. Some areas also stack group-buying discounts. Since this year began, Nanjing has also clarified the baseline for talent housing ticket subsidies: people with junior college or higher education can receive subsidies, with subsidy standards ranging from no less than 30k yuan to no less than 150k yuan. On that basis, each district has further increased the level of subsidies.

In addition, in the first half of this year, many cities are accelerating the rollout of supporting policies for urban renewal. Many regions have issued medium- and 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 Business Herald that the implementation of these supporting policies helps lower corporate development thresholds, simplify approval procedures, and speed up implementation of urban renewal projects—further energizing the vitality of city development.

Driven by a series of policies, after the Spring Festival holiday, many regions’ property markets showed a rebound. According to data from Beijing Municipal Commission of Housing and Urban-Rural Development, in March Beijing’s secondary residential web signings totaled 19,886 units, up 144.6% month over month and up 3.4% year over year, hitting the highest level in nearly 15 months. Data from Shanghai Lianjia Research Institute shows that in the same period, Shanghai’s secondary home transaction volume was 31k units, up 37% compared with January this year and up 6% year over year.

Looking at a broader range, among the 20 cities for which China Index Academy monitors key data for secondary residential housing, March transactions totaled 148k units. After the Spring Festival, the secondary housing transaction volume has been rising month over month for 5 consecutive weeks. In the fourth week of March (March 23–29), the transaction volume reached the weekly high since 2025. The new home market also performed impressively. CRIC data shows that in March, the newly built home transaction area in the top 50 key cities rose to 11 million square meters, up sharply 89% month over month.

But the big month-over-month surge in March transactions is also affected by softer market performance in February due to the Spring Festival holiday. Overall, the real estate market is still in an adjustment period. According to China Index data, in March the newly built home transaction area in key 30 cities fell 7% year over year, and in the first quarter fell 21% year over year. In March, the number of secondary home transaction units in 20 cities fell 2.5% year over year, and in the first quarter fell 4.1% year over year. The foundation for market recovery still needs to be further consolidated, and steady improvement will require continuous policy support.

This year’s Government Work Report clearly stated that efforts should focus on stabilizing the real estate market. Implement “measure by city” policies to control incremental supply, reduce inventory, and improve supply quality; explore ways to revitalize existing inventory of commercial housing through multiple channels; and encourage the acquisition of existing inventory commercial housing for use mainly in affordable housing. Deepen reforms of the housing provident fund system. It also outlined deployment focusing on optimizing affordable housing supply, advancing the construction of “good homes,” defusing risks of real estate developers’ debt, and developing new models for real estate development, among other initiatives.

Zhang Bo believes that in the short term, there is still room to optimize restrictive policies in first-tier cities. Any adjustments may be made dynamically in combination with market transaction performance and inventory-depletion progress, continuing to precisely loosen restrictions in areas such as purchase limits, loan limits, and resale limits, while focusing on supporting rational “just-and-necessary” demand and “just-better” demand. Localities will also seize key consumption windows such as “May Day” and other holidays, concentrate to further increase policy intensity, and stack real estate developers’ favorable promotions to form a resonance effect between policies and the market. At the same time, government measures such as storage/acquisition of existing inventory commercial housing and advancing “swap old for new” in housing will accelerate implementation. On one hand, they can effectively absorb inventory and optimize the supply-demand structure; on the other hand, they can connect the circulation chains of secondary homes and new homes, truly stabilize market expectations, boost homebuyers’ confidence in purchasing, and help the market stabilize and rebound as soon as possible.

Looking at the “Fifteenth Five-Year Plan plus Five-Year” period (15+5), Cao Jingjing believes that combining housing policies with population policies will become an important direction, and first-marriage-and-first-childbearing households as well as multi-child families are expected to become key groups supported by policy. Optimizing housing provident fund policies remains an important lever for strengthening housing security. Supply-side policies will continue the approach of controlling incremental supply, reducing inventory, and improving supply quality. Supporting policies such as revitalizing existing stock and urban renewal are expected to be implemented more quickly.

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

(Editor: Wen Jing)

Keywords:

                                                            Housing provident fund