China has introduced a series of new measures aimed at steering its property market away from a reliance on presale home sales, marking a significant effort to address a prolonged downturn that has dampened consumer demand. The government unveiled the package on Friday through a joint notice issued by the Ministry of Housing and Urban-Rural Development, the Ministry of Natural Resources, and the National Financial Regulatory Administration (NFRA).
The reforms prioritize sales of completed homes over the traditional presale model, requiring local authorities to encourage developers to focus on finished properties. For projects on newly transferred land and those without construction planning permits, the completed-home sales model will be emphasized. Even for projects with existing permits, the guidelines recommend transitioning toward selling completed units. While presales are not eliminated, tighter regulations will govern their use. Individual buildings must reach topping out before sales can begin, and all funds from buyers—including down payments and mortgage proceeds—must be held in supervised accounts to enhance oversight.
To facilitate developers’ shift to selling completed homes, the notice calls for stronger financing support. It recommends the establishment of a lead-bank system, under which a single bank would provide development loans or coordinate lending syndicates for each project. The central bank and NFRA issued separate rules on property financing that same day, stating that development loans must align with the construction and sales cycles of projects. Loans will have a maximum duration of five years for presale developments and seven years for completed-home and commercial projects.
Additionally, new restrictions on the timing of mortgage loan disbursements were detailed. Under the updated rules, mortgage funds for completed homes will only be released once the sale is officially registered, and for presale units, only when the project is formally registered as completed.
Economists have described the policy package as more forceful than the market anticipated. Zhang Zhiwei, president and chief economist at Pinpoint Asset Management, noted that the weakness in China’s domestic demand has been largely driven by the property sector’s struggles. He said the measures indicate that policymakers are acutely aware of the urgency in stabilizing the market. The reforms come amid ongoing concerns about the health of China’s vast real estate industry, which has been a significant drag on broader economic growth.