Shanghai eases housing policies to bolster home buying demand

• In Q3, Shanghai lifted HPRs beyond the outer ring for local and non-local residents who have paid social security or income tax for more than a year. The minimum mortgage rate for second-home purchases was also lowered to match that of first-home purchases.
• Primary home sales volume fell 25.3% q-o-q to 1.27 million sqm due to contracted new supply in Q3. High-end buying demand remained stable, but pre-sale performance varied across newly launched high-end projects. Q3 recorded 796 high-end units sold, down 2.9% q-o-q.

Eight high-end projects launched for sale in the quarter

• New home launches slowed down in the quarter, leading total new home supply to drop 26.6% q-o-q to 1.23 million sqm.
• Eight high-end projects with a total of 931 units were launched for sale in Q3 2025. The average prices of these new high-end projects ranged between RMB 135,800 per sqm to RMB 205,000 per sqm.

High-end primary price rises further amid more lenient price caps

• High-end primary price rose 0.7% q-o-q to RMB 151,900 per sqm in Q3 amid looser price caps. Meanwhile, the average high-end secondary price remained under pressure, falling 2.9% q-o-q to RMB 129,000 per sqm amid slower sales activity and continued homebuyer caution.
• While high-end leasing momentum held steady in the quarter, high-end rents further declined due to ample high-end supply available for lease. Shanghai’s average high-end apartment rent declined 1.3% q-o-q to RMB 155.6 per sqm per month in Q3 2025.

Outlook: Buying demand for primary high-end projects in core locations to remain solid

• We expect the recent relaxation of HPRs beyond the outer ring to have a mild impact on home sales momentum improvement as homebuyer sentiment remains low. That said, we anticipate purchasing demand for high-end projects in core locations to remain solid.
• High-end primary prices are expected to continue to edge up, while high-end secondary prices are likely to decline further due to subdued homebuyer expectations and continued competition from primary projects.