On August 28th, several regulatory bodies, including the Ministry of Housing and Urban-Rural Development, the People's Bank of China, and the financial regulatory authority, announced a sweeping set of policy adjustments affecting the housing sector, financial support for developers, and individual mortgage terms. The Ministry of Housing and Urban-Rural Development, the Ministry of Natural Resources, and the National Financial Regulatory Administration jointly released a notice aimed at improving the commercial housing sales system, directing local governments to actively promote the sale of completed, ready-to-move-in properties. This "see-what-you-buy" approach is designed to cut down on delivery disputes, fundamentally mitigate handover risks, protect homebuyer rights, and accelerate the formation of a new real estate development model. In tandem, the People's Bank of China and the National Financial Regulatory Administration rolled out a companion document focusing on real estate credit management improvements, which lays out the foundational framework for credit policies at a macro level and refines the existing credit system for the property sector.

Industry analysis from the China Index Academy suggests that the 15th Five-Year Plan has set clear goals for high-quality real estate development, with reforming the foundational systems for property development, financing, and sales being a key component. The introduction of these policies represents a concrete step toward fulfilling central government directives, responding to the reality that the housing market has shifted toward a stage of existing inventory, and meeting the urgent needs of the industry's high-quality transformation. The following is a breakdown of the key takeaways from these new measures.

Key Point One: A Unified Pre-sale Threshold Raising the Bar to "Structural Completion"

The new notice tightens the rules for pre-sale management. For projects sold under the pre-sale model, individual buildings must now reach the point of structural completion before they can be offered to buyers. Additionally, all funds from buyers, including down payments and mortgage disbursements, are required to be held in dedicated oversight accounts managed by housing fund regulatory bodies. Projects that had already obtained their construction engineering planning permits before the implementation date of the notice will continue to operate under the previous pre-sale rules and capital supervision requirements. According to the China Index Academy, the current legally mandated pre-sale threshold requires that development investment reach at least 25% of the total construction budget. However, local jurisdictions have applied this standard with significant variation; some follow the legal baseline, others demand structural completion for low-rise buildings (six or seven floors or below) and substantial structural progress for taller buildings, while still others apply more lenient conditions like "grade zero" for specific property types or developers. The new policy establishes a unified national standard of "structural completion," which inevitably pushes back the point at which projects can legally begin selling. This marks a clear step toward the gradual transition to a near-completed housing model, while the allowance for "specific conditions to be determined by local governments" provides the necessary flexibility for regional customization.

Key Point Two: No One-Size-Fits-All Approach to Completed Property Sales

Alongside the changes to pre-sale management, the notice outlines a strategic plan to promote the sale of completed properties. From the date the notice takes effect, new land parcels and any existing land that has not yet obtained a construction engineering planning permit will be prioritized for the completed-property sales model. Projects that have secured their planning permits are encouraged, but not forced, to adopt this approach. The notice also introduces a filing system for completed-property sales and a deposit mechanism for buyers. Officials from the Ministry of Housing and Urban-Rural Development have stressed that the policy is not a blanket mandate. It employs a differentiated strategy for old versus new projects, ensuring "old projects follow old rules, new projects follow new rules." Under this framework, new projects have the flexibility to choose between pre-sale and immediate-sale models, with the former still subject to strict conditions and rigorous funding oversight. The exploration of the completed-property sales model has a long history, potentially tracing back to 2014 when a land parcel in Shanghai's Huangpu District first imposed a no-pre-sale clause, requiring fully finished homes to be sold on a cash basis only. In 2016, Shenzhen followed suit with its first pilot land auction for spot sales in a bid to cool developer enthusiasm. Between 2016 and 2020, during a period of heightened market activity, numerous cities including Shenzhen, Suzhou, Nanjing, Hangzhou, Zhongshan, Chengdu, and the entire province of Hainan introduced land sale conditions that mandated spot sales to temper the overheated land market. Hainan was a trailblazer in March 2020, becoming the first province to formally implement a spot-sale system for all new residential land. Data from PURUI Digital shows that since the end of 2022, over 30 provinces and municipalities have introduced policies encouraging or supporting spot sales. Furthermore, the China Index Academy has monitored that this year alone, more than 20 regions have introduced supportive measures to encourage homebuyers to purchase completed properties, such as increasing provident fund loan limits and offering purchase subsidies. Guangzhou has proposed to actively and prudently plan pilot projects for spot sales, offering financial support such as higher development loan amounts and preferential interest rates for such projects, along with deferred land premium payments for qualifying parcels. Chen Wenjing, research director at the China Index Academy, notes that while comprehensive spot-sale adoption has mostly been seen in third- and fourth-tier cities, first- and second-tier cities are primarily conducting targeted pilot projects. The national policy now clearly defines the pace of this transition, and the introduction of deposit-based sales for completed properties provides a beneficial supplement: developers can collect small deposits after obtaining construction permits, which helps them gauge buyer interest early while also holding them accountable through refund obligations, thus balancing buyer needs for securing a home with developer flexibility.

Key Point Three: Development Loans for Completed Properties Get a Two-Year Extension

As a supporting measure for the reform of the housing sales system, the credit management opinion issued by the central bank introduces a "lead bank system" for real estate development loans. Under this arrangement, each real estate project is assigned a single lead bank, which either provides the loan independently or heads a syndicate. The loan term is now expected to align closely with the project's construction and sales cycle, covering everything from groundbreaking to completion and filing. Specifically, pre-sale projects will have a loan term of no more than three years in principle, with a maximum of five years. However, spot-sale projects benefit from a longer term: up to five years in principle and a maximum of seven years. For commercial property development, the maximum loan term is capped at seven years. The first principal repayment is generally scheduled for after the project's completion filing, though early repayment is permitted by mutual agreement. PURUI Digital's research center identifies the lead bank system as the core of this policy. By designating one bank or banking group per project, all development, construction, and sales funds are consolidated within it, ensuring that the project company's reasonable financing needs are met while giving the bank full visibility and control over the capital flow, thus addressing the current challenge of banks being unable to deploy funds effectively. The extended loan term for spot-sale projects—two years longer than their pre-sale counterparts—specifically covers the extended capital occupation period inherent to the spot-sale model. Additionally, stipulating that principal repayment starts post-completion means that during the construction phase, developers only service interest, which further smooths out their cash flow pressures.

Key Point Four: Mortgage Disbursement Tied Strictly to Project Completion

The new opinion also strengthens the linkage between individual mortgage loans and development loans. It extends the maximum term for personal housing loans from the current 30 years up to 40 years, offering borrowers and lenders greater flexibility, with the exact term to be negotiated between the homebuyer and the commercial bank. All individual mortgage loans must still comply with the minimum down payment requirements, and the loan amount cannot exceed the appraised value of the intended property. For loans with a term of one year or less, repayment can be structured as a lump sum at maturity or on a monthly basis; for longer terms, monthly amortization is required. Industry insiders suggest that the ten-year extension, compared to the previous 30-year ceiling, will meaningfully reduce monthly payments, providing a direct boost to the purchasing power of upgrade buyers. While the total interest paid over the extended life of the loan will increase, the logic of "trading time for space" gives homebuyers a more relaxed choice between short-term repayment capability and long-term debt planning—a clear sign of the policy's flexibility. Furthermore, the opinion mandates that for new homes sold under the spot-sale model, mortgages can only be disbursed after the sale is filed. For pre-sale projects, however, mortgage funds must strictly be held until the project has completed its final filing. This measure is seen as a strong constraint on developers and a robust protection for buyers, effectively eliminating the long-standing problem where homebuyers began paying their monthly mortgage installments while their homes were still under construction, creating a mismatch between payment and delivery, and thus removing a persistent point of friction in the market.

Three Major Implications: Benefits for Buyers, Discipline for Developers, and a Reshaped Market Landscape

According to the China Index Academy, these combined policies—the higher pre-sale threshold, the push toward spot sales, and the supportive credit measures—will have profound effects on homebuyers, property developers, and the broader industry. For homebuyers, the overarching theme is safeguarding their legal rights. The policies achieve this through four primary channels: first, strengthening the pre-sale fund supervision system to protect the security of transaction funds; second, raising the pre-sale bar and promoting spot sales to ensure timely delivery; third, encouraging developers to build "better homes" with improved quality; and fourth, promoting the "hand over keys and property certificate at the same time" practice. For developers, this policy will compel a more sophisticated approach to business operations. The delay in sales revenue realization, due to either the higher pre-sale threshold or the spot-sale model, means companies will need to enhance their capital planning, though supportive land and financial policies are expected to provide some offset. Developers will also need to align their development scale with their actual financial strength, paying closer attention to fund management, cost control, and product quality. Overall, companies with superior product offerings, strong brand equity, and sound financial health are likely to gain a distinct competitive edge. For the market, the short-term effect may be a temporary reduction in new supply, which could help rebalance supply and demand dynamics and accelerate inventory digestion. However, this is expected to be followed by an acceleration in the divergence between city markets, and in the medium to long term, the policy will steer the industry towards a path of higher quality and more sustainable development. As projects under the new rules either delay their market entry or switch to spot sales, the short-term dip in new supply could improve the supply-demand equation and speed up destocking; yet given the currently high overall inventory levels, the immediate impact on housing prices is likely to be neutral. Additionally, because the policy grants local governments the freedom to tailor implementation, the strength of the response will vary by region. With developers focusing their investments on premium land parcels, the trend of market divergence between cities is set to intensify further.