Property & Real Estate

China has settled on a two-speed adjustment: structurally dismantling presale finance while prime-city housing demand visibly stabilizes. The Aug 28 reform remains the governing framework — PBOC and NFRA's Opinions set development-loan tenors at up to 5 years for presale projects and 7 for completed ones, extend personal mortgage terms to 40 years, and move mortgage disbursement for presale homes to after project-completion filing ^1,2. The same package, with MOHURD and the Ministry of Natural Resources, requires topping out before sales and tighter presale-fund supervision ³.

Those rules are not a rescue. Caixin's Aug 31 analysis frames them as a firewall on shadow banking and local-government financing risk, with trusts, commercial-property debt, and urban-renewal lending brought under the same project-centered, lead-bank, closed-fund discipline ⁴. The financing chain that built the presale era is being deliberately severed: Caixin reports trillions of yuan in presale proceeds will now arrive later, forcing developers to replan every project cash flow from land purchase to completion ³.

The completed-home shift is now openly articulated, not just embedded in regulation. Sixth Tone's Sept 2 explainer notes that in 2025 roughly two-thirds of new homes were sold before completion, and describes the MOHURD-NFRA-MNR guidelines as the start of a long transition away from the 1990s presale system ⁵. The strategic direction is unchanged: new-model finance must be project-based, with CSRC channeling equity, bond, CMBS/ABS, and REIT financing toward project-level instruments ⁶.

Yet the demand side is showing life in the leading market. Shanghai reported 20,700 second-hand transactions in August, up 18% year on year — the sixth consecutive month above 20,000 — and agents say the Aug 28 package plus '沪八条' (Shanghai's eight measures) is lifting showings and expectations ⁷. The same report records a new, tentative behavioral shift: some sellers are testing 2–3% price increases in districts like Baoshan's Yanghang, where prices have fallen to 60–70% of peak and strong transaction volumes are draining supply of quality stock ⁷.

This Shanghai signal should be read with its limits, not extrapolated. It is one city, and the price moves are exploratory — measured in tens of thousands of yuan — not a general turn. Nationally, the funding-chain gap is the binding constraint: developers that relied on presale receipts to repay land and construction debt now need the lead-bank project loans to be disbursed at comparable scale and pace, and no transitional rule for projects already pre-sold has been published ^3,4.

Urban renewal continues to serve as the replacement for developer-led expansion. Guizhou's Sept 2 press conference laid out its 15th Five-Year urban-renewal plan with four focus areas — mechanism innovation, district renewal, project implementation, and investment-financing innovation — built on a '先体检、后更新' (examine first, renew later) workflow and a three-tier planning system ⁸. In Chongqing, Mayor Chen Xinwu said urban renewal must be market-oriented and '算好资金平衡账' (balance the books) while embedding safety upgrades, reflecting the same template ⁹.

Net assessment: the direction and the instruments are now clear; what will decide the transition is execution. Watch whether the first wave of lead-bank project loans reaches private builders at the scale the completed-home rules require, whether presale-eligibility is enforced uniformly across provinces, and whether Shanghai-style demand strength broadens beyond the top-tier cities. If project loans lag, delivery risk migrates from presale projects into the new pipeline.