China unveiled a comprehensive set of property sector reforms on Friday aimed at fostering a more stable and sustainable real estate market. The measures introduce a shift away from the long-standing development model characterized by rapid, leveraged expansion, promoting instead greater certainty for homebuyers and stronger financial safeguards for developers.

Central to the reforms is a phased overhaul of the presale system. Instead of a uniform approach across cities, the new rules prioritize the sale of completed homes on newly sold residential land and on previously sold plots that have yet to receive construction planning permits. For projects still relying on presales, developers must achieve structural topping out of each building before offering homes for sale. This shift is intended to reduce information asymmetry between buyers and builders by allowing purchasers to physically inspect properties before committing.

The reforms also impose stricter controls on the flow of funds associated with property transactions. Down payments, mortgage proceeds, and other purchase monies are now required to be deposited into supervised accounts. For presold properties, mortgage funds will be released only after projects have been officially registered as complete, rather than at the structural topping-out phase. For completed homes, disbursement occurs post-sale registration. This alignment of financial releases with construction milestones enables closer monitoring of funds, aims to mitigate project risk, and seeks to ensure that payments are protected throughout the transaction process.

In addition to financial safeguards, the package includes provisions to extend the maximum mortgage term from 30 to 40 years, marking the first increase in the national mortgage ceiling since 1999. Analysts estimate that this extension could lower monthly repayments by approximately 15%, easing affordability pressures for homebuyers, particularly first-time purchasers and families upgrading their housing.

Recognizing the critical role of developer financing in meeting stricter delivery requirements, the reforms encourage financial institutions to differentiate risks at the developer group level from those at individual project levels. Banks are urged to place greater emphasis on project quality, cash flow, and overall viability when extending credit. The package also promotes broader use of financing instruments such as bonds, asset-backed securities, and real estate investment trusts to channel capital toward sustainable projects, including those focused on safety, environmental standards, and smart technologies.

Collectively, these reforms seek to transition China’s property market away from high-risk speculative practices toward a development model centered on the principle that “housing is for living in, not for speculation.” Officials expect the measures to stabilize market expectations, reduce industry risks, and support the alignment of real estate growth with broader financial stability objectives, ultimately guiding the sector toward healthier long-term development.