What happened
Following the August 28 joint policy package by five departments—covering commercial housing sales reform, extending personal mortgage terms to a maximum of 40 years, and capital market support for developer financing—major cities have shown immediate market reactions. In Shenzhen, platform views jumped 582% week-on-week on the first post-policy weekend, and Shanghai saw 1,205 second-hand home transactions on the first Saturday of the 'golden September and silver October' season, up 89.5% from the previous day.
On the supply side, some developers have started to withdraw discounts. Chengdu-based developer Jiahexing announced that from September 15, it will reduce discounts by 2% across its 10-plus projects, while China Travel Investment's subsidiaries will also cut discounts by 2% on certain projects starting September 7, citing a reassessment of asset values in the new policy environment.
Why it matters
The policy aims to reshape the property market by shifting toward presale restrictions and extending loan periods, which could stabilize demand but also increase developers' capital pressure. The observed uptick in activity suggests the policy is beginning to restore buyer confidence, potentially leading to a more sustained recovery in the 'golden September and silver October' season.
Developers' moves to reduce discounts indicate a strategic response to anticipated tighter supply and higher costs under the new rules, which may signal a shift in pricing power from buyers to sellers in strong-market cities.
Key facts
The August 28 policy includes commercial housing sales reform, mortgage term extension to 40 years, and capital market support for developers.
Shenzhen platform views rose 582% week-on-week on the first post-policy weekend; Shanghai saw 1,205 second-hand transactions on September 5, up 89.5% from the prior day.
Chengdu's Jiahexing will cut discounts by 2% from September 15; China Travel Investment will cut discounts by 2% from September 7.
Beijing's new home transactions in week 35 (Aug 24-30) rose 79.9% in volume, 73.4% in area, and 60.4% in value week-on-week.
What to watch next
Whether the sales momentum in Shenzhen and Shanghai continues into the coming weeks, especially if Shanghai's weekday second-hand transactions stay above 700 units and listings remain in the 318,000-320,000 range.
How other developers follow suit in adjusting discounts or pricing strategies, and whether the shift toward presale restrictions leads to longer project cash-flow cycles, potentially affecting new supply in the medium term.