Expand the scenarios for housing fund withdrawal to help boost the recovery of the real estate industry

Ask AI · How can the adjustment of the housing provident fund policy precisely empower the new stage of housing consumption?

Recently, many regions have begun to adjust their housing provident fund policies. According to incomplete statistics, since the beginning of this year, over 30 cities nationwide have adjusted and optimized their provident fund loan policies. At the Central Economic Work Conference held at the end of 2025, “Deepening the reform of the housing provident fund system” was mentioned separately. This requirement was also included in this year’s “Government Work Report.”

Currently, what provident fund adjustment policies have been introduced in various regions? What impact will they have on the real estate market? Which areas will the reform of the provident fund system further promote into?

Adjustments with different focuses

Currently, many regions across the country are accelerating the implementation of measures related to the reform of the provident fund, with policies tailored to specific needs and targeted efforts.

In terms of optimizing loan limits and recognition, Chengdu plans to moderately increase the maximum housing provident fund loan limit. For purchasing housing in Chengdu with a provident fund loan, the maximum loan amount for a single contributor will be increased from 600k yuan to 800k yuan, and for dual contributors from 1 million yuan to 1.2 million yuan. Shenyang, starting from March 15, 2026, will adjust the maximum loan limit for employees who contribute solely on their own to 900k yuan from 650k yuan; for couples contributing housing provident funds, from 850k yuan to 1.5 million yuan; and for families of three or more contributing jointly, from 1.05 million yuan to 2.1 million yuan.

In terms of relaxing withdrawal scenarios and conditions, Fuzhou has added channels for withdrawing funds for housing renovations to ease workers’ renovation funding pressures; adjusted conditions for garage (parking space) withdrawals to facilitate residents in improving housing amenities; expanded intergenerational mutual aid scope to fully leverage family purchasing power; and relaxed withdrawal conditions for constructing, rebuilding, or major repairs of self-occupied housing, extending application time limits. Shenyang supports contributors and their spouses purchasing self-occupied housing within the administrative region, and for those purchasing parking spaces or garages without property registration in the same community, they can withdraw housing provident funds within one year of purchase to pay for these, with a combined maximum withdrawal amount of 30k yuan.

In terms of streamlining procedures, Xi’an Housing Provident Fund Management Center issued relevant notices to optimize the process for unemployed contributors to withdraw housing provident funds, further safeguarding the legal rights of contributors, and simplifying and standardizing withdrawal procedures.

According to statistics released by E-House Research Institute, in the past year, 305 policies for optimizing the provident fund were issued nationwide, accounting for 65% of policies related to housing demand. Yan Yuejin, Deputy Director of the E-House Research Institute in Shanghai, stated that the logic of this round of reform has shifted — from the previous focus on providing universal financial support during the “whether there is” stage to a new stage of precise empowerment of housing consumption. “This shift means that the housing provident fund should not only continue to optimize traditional dimensions such as loan limits and interest rates but also play a more active role in supporting new citizens settling in, boosting domestic demand, serving the ‘good housing’ strategy, and exploring application scenarios, thereby achieving coordinated efforts across multiple policy goals,” Yan Yuejin said.

Impacts still to be verified

What impact will the adjustment of the housing provident fund policy have on the real estate market? Yan Yuejin said that expanding the use of the provident fund can help promote a rebound in the real estate industry. Currently, the national economy maintains steady growth, and consumer demand continues to be released. At this time, the phased adjustment of provident fund policies across regions can support rigid demand homebuyers. Meanwhile, policies can also form an effective synergy with local “de-stocking” efforts.

Industry experts believe that stabilizing the real estate market is an important foundation for rebuilding residents’ confidence in consumption. Stabilized housing prices can quickly restore residents’ wealth expectations and drive the recovery of upstream and downstream industries. The adjustment of the provident fund policy is undoubtedly an important tool to promote the steady and healthy development of the real estate market.

Li Yujia, Chief Researcher at the Guangdong Housing Policy Research Center, said that the adjustment of the provident fund policy lowers the threshold and costs of purchasing a home, optimizes the use of funds, and especially for those unwilling to take commercial loans, the increased limits can significantly reduce monthly payments. Additionally, the adjustment of down payment requirements lowers entry barriers, reducing the burden on many young people to buy homes, which helps stimulate purchase intentions.

“We have observed that some housing projects have recently seen a noticeable increase in customers using the housing provident fund for loans. At the same time, relaxing withdrawal scenarios and conditions allows for diversified housing consumption to be supported by funds, which is beneficial for renovating existing homes and owner exchanges, as well as for purchasing and consuming non-residential properties,” Li Yujia said.

However, some industry experts also believe that the impact of the provident fund policy adjustment on the real estate market still needs to be observed. As the use of the provident fund becomes more diversified, it will promote housing repairs, improvements, and related consumption. But it should also be noted that both the new and second-hand housing markets currently have very low commercial loan interest rates, and compared to that, the interest rate advantage of provident fund loans is not prominent, so the actual impact on consumers with urgent needs is limited.

Enriching usage scenarios

China’s housing provident fund system originated in the 1990s, initially aimed at supporting the livelihood goal of “housing for all.” Over the long term, the system has played a key role in reducing residents’ home purchase costs and supporting first-time buyers. However, with urbanization advancing, employment patterns becoming more diverse, and residents’ housing needs shifting from “having a house” to “living in a good house,” issues such as narrow scope and underutilization of the provident fund have begun to emerge. In the future, broadening the scope of provident fund use will be an important direction for system reform.

Li Yujia explained that past housing finance mainly relied on commercial mortgages, which adapted to the rapid development of commodity housing and a hot property market. The share of provident fund loans in the housing credit market has always been relatively low, peaking at about 20%. As the real estate industry enters a new development stage, the positioning and demand for housing finance are changing, requiring new methods to expand the use of the provident fund.

According to the “Regulations on the Management of the Housing Provident Fund,” the provident fund belongs to the individual employee, but specific conditions must be met to withdraw and use it. The regulations specify six scenarios where employees can withdraw their account balance, three of which are related to housing: purchasing, constructing, rebuilding, or major repairs of self-occupied housing; repaying housing loans; and paying rent exceeding a certain proportion of household income (with specific local regulations). However, in practice, due to restrictive conditions on individual use, there are often situations where funds are “dormant.”

Zhang Bo, President of 58 Anjuke Research Institute, said that there are significant regional differences in the use of provident fund funds: in first-tier cities, deposit balances are high, but the high total house prices mean the loan limits are relatively small; in third- and fourth-tier cities, deposit balances are ample, but due to low recent housing demand, the actual utilization efficiency of funds is relatively low. Additionally, the interest rate gap between the provident fund and commercial loans is narrowing, and with more flexible commercial loan approval processes, homebuyers tend to prefer commercial loans.

Deepening the reform of the provident fund system mainly focuses on making existing funds truly “come alive” and “be used efficiently.” From the exploratory practices in various regions, reforms mainly advance through expanding coverage, improving quality, and increasing efficiency—such as broadening coverage to include flexible employment personnel and new residents, breaking down identity barriers; expanding use scenarios from focusing mainly on home purchase to supporting rent-to-own, extending to rental, renovation, old community upgrades, and property management fees, covering the entire housing consumption cycle.

Li Yujia suggested that efforts should be made to broaden the use scenarios of the provident fund, enhance contributors’ willingness to deposit, and expand the scale of the fund; simultaneously, support for long-term housing consumption should be strengthened, fully leveraging the provident fund’s role in supporting new residents from settling in cities to establishing roots, from “housing for all” (renting) to “owning a home” (buying).

Yan Yuejin believed that housing provident funds should evolve from “single-purpose home purchase payments” to “multi-purpose consumption support,” transforming from a “small wallet” to a “big wallet,” truly becoming a key node connecting residents’ savings with diversified consumption. On one hand, the support scope should extend from simple home transactions to include house replacement, old community renovation, decoration, furniture and appliance purchases, and other “full lifecycle” housing consumption, including property fee payments, creating a true “housing comprehensive account”; on the other hand, application scenarios should be moderately expanded, gradually exploring extending the use of provident funds to more fields to better serve residents’ quality of life. (Source: Economic Daily, Author: Huang Chunjian, China Economic Net)