More than 60 local policies on housing provident funds were introduced in the first quarter. Has the real estate market trend changed?

Local new policies on housing provident funds are being implemented intensively, becoming an important tool to stabilize the real estate market.

Starting April 1, Hangzhou officially implemented new policies on housing provident funds, significantly increasing the maximum loan limit to 1.8 million yuan; on March 31, Hainan clarified that depositors can withdraw provident funds to support their children in purchasing their first home; on March 24, Chengdu announced a phased removal of the limit on the number of provident fund loans, allowing depositors with no outstanding provident fund loans to apply; on February 25, Shanghai raised the maximum loan amount from 1.6 million yuan to 2.4 million yuan, and with the additional floating policy, the maximum loan can reach 3.24 million yuan…

According to the China Index Academy, in the first quarter, over 60 policies related to provident funds were introduced across provinces and cities nationwide, accounting for nearly 38% of all local real estate-related policies, making it a core focus of local efforts to optimize real estate policies. Main directions of these new policies include increasing loan limits, optimizing loan frequency recognition, expanding withdrawal and usage scope, and improving deposit policies. Besides, in the first quarter, around 100 policies were introduced focusing on activating housing demand, destocking inventory, revitalizing stock, and other goals, including optimizing restrictive policies, issuing home purchase subsidies, improving urban renewal supporting policies, and refining policies related to affordable housing.

Under the dual effects of policy support and market recovery after the Spring Festival holiday, transaction activity in key cities saw a phased rebound in March. CRIC data shows that in March, the transaction area of new homes in 50 key cities rose to 11 million square meters, a significant month-on-month increase of 89%. China Index data indicates that in 20 cities, second-hand residential transactions reached 148k units in March, up 119% month-on-month, with second-hand housing transactions continuing to rise for five consecutive weeks after the Spring Festival. However, the overall real estate market remains in a correction phase, with notable differentiation among cities of different tiers.

According to experts interviewed, in the demand side, local governments are expected to strengthen support for first-time married and newly parented families, multi-child families, and continue deepening reforms of the housing provident fund system. Core cities are likely to further optimize restrictive policies.

Intensive implementation of new provident fund policies

Recently, Hangzhou’s new housing provident fund policy, “Hang Eight Articles,” was officially released, covering increases in maximum loan limits and multiples, enhanced floating benefits, optimized loan qualification recognition, new support for paying property taxes and management fees, relaxed timing restrictions for housing construction and purchase withdrawals, and expanded scope for intergenerational family mutual aid withdrawals, with notable policy strength.

Under the new policy, Hangzhou’s maximum housing provident fund loan amount increased from 1.3 million yuan to 1.8 million yuan, with individual employees able to borrow up to 900k yuan. The calculation multiple for individual loan limits was adjusted from 15 times to 20 times, and new scenarios were added where new residents and young families could enjoy a 20% increase in loan limits. The loan limit for families with multiple children was raised from 20% to 50%, with no limit on the number of times the floating benefit could be enjoyed. Different floating types can be combined, with the maximum cumulative floating benefit reaching 70%, totaling up to 3.06 million yuan.

Regarding loan qualification recognition, the “Hang Eight Articles” clarified that when a family applies for a provident fund loan for their first or second self-occupied home, the previous housing purchased with a provident fund loan that has been sold can be deducted from the number of available loan times.

According to Shangguan Jian, director of Beike Research Institute in Hangzhou, data from Beike’s Hangzhou branch shows that since last year, about 29.8% of housing transactions involved the use of provident fund loans, with the proportion of transactions using only provident fund loans rising from 6.6% in January last year to 10.7% currently. From the new signed contracts this year, 57.5% and 76.9% are within 2 million and 3 million yuan respectively. After the policy implementation, most families in Hangzhou will be able to significantly reduce their home-buying financial pressure through provident fund loans.

Expanding the scope of provident fund withdrawals and usage is also a key highlight of this policy. New support includes withdrawals for paying property taxes on home purchases and property management fees for self-occupied homes in Hangzhou, marking the first time property management fees are included in withdrawal scope. Additionally, the scope of intergenerational family mutual aid withdrawals has expanded from direct relatives of the homebuyer to include spouses, parents, children, and their spouses.

Shangguan Jian believes that Hangzhou’s new provident fund policy demonstrates targeted support for various housing needs, especially focusing on young people settling down, first-time buyers, and those with urgent needs. Implemented at a critical moment of the “small spring” market rebound, combined with existing relaxed policies, it will help further release housing demand.

As a typical example of recent local policies, the “Hang Eight Articles” have strong demonstration significance in terms of policy strength and coverage. Data from China Index shows that in the first quarter, over 60 policies related to provident funds were introduced nationwide, accounting for the highest proportion among all real estate policies, with about half launched in March. Increasing loan limits, optimizing withdrawal frequency, and broadening withdrawal scope are the main focuses of policy improvements across regions.

Local policies continue to follow up: on February 25, Shanghai increased the maximum provident fund loan from 1.6 million yuan to 2.4 million yuan, with floating benefits, the maximum loan can reach 3.24 million yuan; on March 24, Chengdu phased out the limit on the number of provident fund loans, allowing applicants with no outstanding loans to apply; on March 31, Hainan clarified that depositors can withdraw provident funds to support their children’s first home purchase.

“Adjustments to provident fund policies have become direct and effective tools for supporting first-time homebuyers, reducing their costs, and stabilizing market expectations. Their role in stimulating demand among first-time buyers is especially evident,” said Zhang Bo, director of 58 Housing Market Research Institute, to 21st Century Business Herald.

Beyond supporting home purchases, local governments are also continuously expanding the scenarios for provident fund use.

On March 31, Anhui Province’s Housing Provident Fund Management Center issued new policies supporting withdrawals for property management fees, urban renewal housing renovation costs, property taxes, and special maintenance funds, as well as expanding the scope for withdrawals related to major illnesses. Chengdu’s new policies increased support for withdrawals for serious illnesses; depositors and their spouses, parents, and children suffering from major diseases can apply to withdraw the full available balance of their provident fund accounts to pay medical expenses, with no limit on withdrawal frequency. They also support withdrawals for parking spaces, with each space’s withdrawal amount capped at 100k yuan.

Zhang Bo pointed out that the implementation of provident fund policies in core cities will play a greater role in restoring market expectations, encouraging homebuyers to shift from hesitation to active participation, and boosting market activity. On a macro level, the current round of policy optimization, represented by Hangzhou, essentially marks the systemic reform of the housing provident fund system amid a new real estate cycle. Policies are accelerating the transition toward a combination of rental and purchase, full-cycle housing security, with measures such as expanding withdrawal scenarios, family mutual aid, nationwide processing, and flexible employment deposit expansion.

In March, transactions in key cities surged month-on-month

Including policies related to provident funds, about 160 real estate policies were introduced across regions in the first quarter. Besides provident fund policies, optimizing restrictive policies, issuing home purchase subsidies, promoting “good housing,” and accelerating urban renewal are also key policy directions this year.

Regarding restrictive policies, on February 25, Shanghai further reduced housing purchase restrictions, shortening the social security or individual income tax payment period for non-Shanghai residents to over one year for buying homes inside the outer ring, and supporting eligible non-Shanghai residents to purchase an additional home inside the outer ring. The policy also clarified that residents with Shanghai residence permits can buy homes in Shanghai. This policy directly expands the demand pool for housing inside Shanghai’s outer ring and promotes more precise release of demand.

In terms of purchase subsidies, recent policies in Gongshu, Xiaoshan, Yuhang, Linping, Qiantang, and Lin’an districts in Hangzhou have introduced subsidies or “purchase + consumption voucher” policies, with maximum subsidies of 100k yuan per unit, and some areas stacking group-buy discounts. Since the beginning of the year, Nanjing has also clarified talent housing voucher subsidies, with a standard of at least 30k to 150k yuan for those with college degrees or higher. Further subsidy increases have been implemented in various districts.

Additionally, many cities are accelerating urban renewal supporting policies, with some issuing long-term action plans or five-year special plans. Cao Jingjing, general manager of the Index Research Department at China Index Academy, said that these policies will help lower development thresholds, simplify approval procedures, accelerate project implementation, and further activate urban development vitality.

Driven by these policies, many markets have shown signs of warming after the Spring Festival. Data from Beijing’s Housing and Urban-Rural Development Commission shows that in March, second-hand home transactions reached 19,886 units, up 144.6% month-on-month and 3.4% year-on-year, hitting the highest level in nearly 15 months; Lianjia Research Institute in Shanghai reports that in the same period, second-hand home transactions reached 31k units, a 37% increase from January and a 6% year-on-year rise.

On a broader scale, China Index Academy’s monitoring of 20 key cities shows that in March, second-hand transactions totaled 148k units, with volume continuing to rise for five consecutive weeks after the Spring Festival. The transaction volume in the fourth week (March 23–29) reached a weekly high since 2025. The new home market also performed well, with CRIC data showing that in March, new home transaction area in 50 key cities rose to 11 million square meters, a significant month-on-month increase of 89%.

However, the sharp month-on-month increase in March transactions is partly influenced by the subdued market performance in February due to the Spring Festival holiday. The overall real estate market remains in a correction phase. Data from China Index shows that in March, new home transaction area in 30 key cities decreased by 7% year-on-year, and in the first quarter, down 21%. Second-hand home transactions in 20 cities declined by 2.5% year-on-year in March, with a 4.1% decrease in the first quarter. The foundation for market recovery still needs further consolidation, and stable market conditions require continued policy support.

The government’s work report this year explicitly states the need to stabilize the real estate market. Policies include city-specific measures to control growth, reduce inventory, optimize supply, explore multiple channels to activate stock properties, and encourage acquisition of stock for affordable housing. Deepening reform of the housing provident fund system is also emphasized, along with measures to optimize affordable housing supply, promote “good housing,” resolve developer debt risks, and develop new real estate models.

Zhang Bo believes that in the short term, restrictions in first-tier cities still have room for optimization, possibly through dynamic adjustments based on market transaction and destocking progress, continuing targeted easing of purchase restrictions, mortgage limits, and sale restrictions to support reasonable demand and improvement needs. Local governments will also seize key consumption windows like “May Day,” intensify policy efforts, and combine with developer promotions to create policy-market resonance. Meanwhile, measures such as government stockpiling of stock properties and promoting “old-for-new” housing exchanges will accelerate, effectively digesting inventory, optimizing supply-demand structure, and facilitating the circulation of second-hand and new homes, stabilizing market expectations, boosting confidence, and helping the market recover quickly.

Looking ahead to the “14th Five-Year Plan,” Cao Jingjing believes that housing policy combined with population policy will become a key focus, with first-time married and newly parented families, as well as multi-child families, likely to be prioritized. Continued optimization of the housing provident fund remains an important tool for strengthening housing security, while supply-side policies will continue to focus on controlling growth, reducing inventory, and optimizing supply, with supporting policies on stock activation and urban renewal expected to accelerate implementation.

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