Shanghai has lifted restrictions on the number of homes local residents can own outside the city’s outer ring road and slashed mortgage rates for second-home buyers to 3.05 percent from 3.35 percent, aligning with first-home rates, authorities announced on August 25, 2025, aiming to revive China’s struggling property sector.

The policy shift, affecting two-thirds of Shanghai’s housing stock, responds to a 3.4 percent year-on-year drop in new home prices across 70 Chinese cities in July, per the National Bureau of Statistics.

Pre-owned home prices fell 5.9 percent in July, continuing a decline since April 2022. “The policy adjustment aims to address residents’ pent-up housing needs and improve living conditions,” the Shanghai government stated, seeking to stabilize the real estate market.

Previously, Shanghai families were limited to two housing units citywide. The new rules, mirroring Beijing’s efforts to stimulate demand, are expected to spur purchases in suburban areas. The city, China’s commercial hub, joins other regions in easing property controls to counter a prolonged market downturn impacting economic growth.

The measures aim to boost consumer confidence and housing demand, though analysts note persistent challenges like oversupply and weak buyer sentiment may limit recovery. The policy shift marks a significant step in addressing China’s property crisis, with Shanghai’s actions potentially influencing other major cities.