Shanghai Set to Ease Home-Buying Curbs, Spurring Developers' Stocks Higher

By Megan Cheah and Sherry Qin

Shanghai plans to ease homebuying rules further, a move aimed at spurring demand as China's years-long property slump drags on.

The latest rules allow non-resident individuals who have paid social security or individual tax for a year to purchase homes in urban areas. Previous rules required non-local residents to pay taxes for at least three years.

Meanwhile, non-resident individuals who have paid taxes for three years or more can buy one extra home in urban areas in addition to the existing housing purchase restriction policy.

The changes will come into effect on Thursday, it said.

Wednesday's news sent shares of property developers soaring in Hong Kong, but previous rounds of similar measures in Shanghai and other major cities suggest the cheer won't be long-lived.

The urgency of policy stimulus in Shanghai is relatively low, as its new-home prices have outperformed most other Chinese cities in recent years, said Morningstar analyst Jeff Zhang in an email.

Analysts say that to truly turn the Chinese property sector around, officials need to buoy consumer and business confidence. That requires addressing structural issues like a weak social security net, and enduring problems like an excess supply of housing and huge piles of property-related debt.

More property policy support is likely in the coming weeks, with the Chinese government set to hold a series of meetings, dubbed the "Two Sessions", in March, said Yu Song, UBS Securities' chief China economist.

While he expects some stabilization in terms of activity and prices in some cities with decent fundamental support, he doesn't anticipate a complete sector turnaround.

"We expect it to struggle for quarters instead of weeks," he said.

Still, markets took some heart at the most recent round of property easing on Wednesday.

Hong Kong's Hang Seng Mainland Properties Index, which tracks the top 10 largest stocks with adequate liquidity in the sector, rose as much as 4.6% before paring gains to end 2.3% higher.

Property developer Longfor Group's shares gained 4.6%, while red-chip China Resources Land rose 2.6%. Country Garden's stock finished 6.45% higher.

State-owned developers such as China Overseas Land & Investment and China Resources Land are likely to be the biggest beneficiaries of Shanghai's reduced restrictions, as they have a strong presence in the city's central area, said Morningstar's Zhang.

"Overall, we expect state-controlled developers to see pickups in margins as new home prices in large cities rebound starting in 2026," he added.

Write to Megan Cheah at megan.cheah@wsj.com and Sherry Qin at sherry.qin@wsj.com.

(END) Dow Jones Newswires

February 25, 2026 03:55 ET (08:55 GMT)