Shenzhen housing market policy easing slightly stronger than expected

Overview

This report comments on Shenzhen's new round of housing market support policies announced on April 29, 2026. J.P. Morgan believes the market had generally expected Shenzhen to follow up with easing after Beijing and Shanghai, but the policy intensity is slightly stronger than expected, especially in terms of purchase eligibility in restricted areas and housing provident fund loan limits. The report judges that this policy will help improve Shenzhen's housing market transaction volumes and prices over the next 1-2 months, but local-level policy easing typically stimulates short-term demand, and investors are now more focused on whether price stabilization and sales improvement can form a more lasting self-repair.

Core views

Core views include: First, this round of Shenzhen easing is mainly targeted at non-local home buyers, with stronger intensity than Beijing and Shanghai; for example, non-local families need only 1-year personal income tax proof to buy up to 3 homes in restricted areas, and those with a residence permit can also buy 1 home. Second, housing provident fund support has significantly strengthened; Shenzhen's maximum loan limit can be extended to RMB 3.5mn, higher than Shanghai's RMB 2.4mn and Beijing's RMB 1.2mn. Third, Shenzhen's second-hand housing prices have still fallen 3.4% since August 2025 and are 44% below the peak, with an inventory destocking cycle of about 22 months, so further easing helps maintain the stabilization trend. Fourth, in terms of industry investment, the report places more emphasis on sales performance and fundamental improvement over the next 3-6 months, preferring COLI, China Jinmao, China Resources Land, and China Resources Mixc.

Analysis framework

The report uses four types of analysis: policy comparison, historical market reaction, city fundamental indicators, and company exposure. It first compares Shenzhen, Beijing, and Shanghai on purchase restrictions and housing provident fund policies, then reviews stock price performance after previous tier-1 city policy easing, combines Shenzhen's second-hand housing prices, inventory months, and transaction improvement signs to judge policy necessity, and finally screens potential beneficiaries based on developers' sales and land bank exposure in Shenzhen and tier-1 cities.

Methodology notes

• Policy researchTier-1 city purchase restriction and housing provident fund policy comparison

  Compare Shenzhen, Beijing, and Shanghai on the extent of HPR and HPF policy easing

  The report measures policy intensity through purchase eligibility, years of tax/payment proof, number of homes purchasable in restricted areas, and maximum housing provident fund loan limit, concluding that Shenzhen's easing is stronger than Beijing and Shanghai.

• Market reaction analysisStock price performance review after policy easing

  Observe 1-day, 3-day, 5-day performance of Chinese developers relative to HSCEI after tier-1 city policy easing

  History shows that local policy easing has limited short-term boost to property stocks, with strong reactions more coming from national-level narrative changes or larger-scale policy shifts.

• Fundamental trackingSecond-hand housing price and inventory months

  Use month-on-month price changes, cumulative decline, and inventory destocking cycle to judge policy necessity

  Shenzhen's second-hand housing prices have still fallen 3.4% since August 2025, with inventory months at about 22 months, indicating the market still needs policy support to maintain the stabilization trend.

• Stock screeningDeveloper city exposure and sales performance

  Identify beneficiaries based on Shenzhen sales rankings, tier-1 city land bank, and year-to-date sales performance

  The report considers COLI, China Jinmao, China Resources Land, and China Resources Mixc relatively attractive, with COLI and China Jinmao having more obvious upside in the next 3-6 months.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• China Overseas Land & Investment (0688.HK) / COLI

  Leading in Shenzhen sales and listed by the report as a target with more upside in the next 3-6 months

  Strengths

  Ranked first in Shenzhen 3M26 sales, year-to-date sales performance better than peers; J.P. Morgan rating is OW in the valuation table.

  Weaknesses

  Still constrained by overall weak industry demand, low housing prices, and the short-term nature of policy effects.

  Comparison

  Compared to most developers, COLI is a key beneficiary clearly mentioned by the report with lagging but better sales than peers.

  Risks

  Insufficient duration of Shenzhen policy boost, failure of housing prices to stabilize, continued moderate market reaction to local easing.

• China Jinmao (0817.HK)

  The report believes its trend of outperforming sales may continue, making it one of the targets with greater upside in the next 3-6 months

  Strengths

  J.P. Morgan rating is OW, the report is optimistic about its sustained sales outperformance compared to peers.

  Weaknesses

  Valuation table shows 1FY and 2FY P/E are relatively high; short-term stock price may be affected by industry sentiment.

  Comparison

  Listed together with COLI as a key target with relatively more upside.

  Risks

  Sales improvement below expectations, weak policy transmission, pressure on financing and profitability.

• China Resources Land (1109.HK) / CR Land

  Top three in Shenzhen sales, the report indicates continued preference

  Strengths

  Ranked third in Shenzhen 3M26 sales; J.P. Morgan rating is OW; valuation table shows year-to-date stock price up 21%.

  Weaknesses

  Stock price near historical highs, valuation recovery space may be less than for more lagging targets.

  Comparison

  Compared to COLI and Jinmao, the report's tone is 'also like it', but it is not listed as the core lagging target with the most upside.

  Risks

  Diminishing policy catalysts, unsustainable sales growth, valuation already sufficiently reflecting high-quality SOE premium.

• China Resources Mixc Lifestyle Services (1209.HK) / CR Mixc

  Report's preferred property management/commercial operations related target

  Strengths

  J.P. Morgan rating is OW, valuation table shows 1-year return of 37%, relatively strong asset quality and commercial operation attributes.

  Weaknesses

  Affected by the property development chain's health and parent company's sales and delivery pace.

  Comparison

  Valuation is higher among property management sector, with 1FY P/E of 21.7x and P/B of 6.1x, reflecting high market recognition of its quality.

  Risks

  Slowing commercial operations growth, weakening parent company property sales, valuation compression.

• Shenzhen Investment

  Ranked second in Shenzhen 3M26 sales, may be driven by local policy easing

  Strengths

  Outstanding local Shenzhen sales scale, with 3M26 sales of about RMB 7bn.

  Weaknesses

  The report does not give J.P. Morgan rating and detailed investment views in the valuation table.

  Comparison

  Close to COLI in Shenzhen sales ranking, but the report's main investment preference does not focus heavily on this target.

  Risks

  Lack of clear rating support, short-term policy effects, regional concentration risk.

Key data

• Policy release date2026-04-29Shenzhen announced a notice to further support the housing market, with new policies effective from 2026-04-30.
• Shenzhen last easing time2025-09About 7 months since the last round of Shenzhen easing.
• Non-local family purchase eligibility in restricted areasUp to 3 homes with 1-year personal income tax proof; 1 home with residence permitCompared to Shanghai's 3-year tax proof for up to 2 homes and Beijing's 2-year tax proof for 1 home within the 5th Ring Road, Shenzhen's restrictions are looser.
• Housing provident fund basic maximum loan limitRMB 1.3mnFirst-time home buyer limit can be increased by 60% to RMB 2.1mn; multi-child families and other groups have additional increases.
• Housing provident fund extended maximum loan limitRMB 3.5mnThe report states Shenzhen's extended maximum limit is higher than Shanghai's RMB 2.4mn and Beijing's RMB 1.2mn.
• Shenzhen second-hand housing price performanceDown 3.4% since August 2025, 44% below peakData source is Centaline, showing prices remain at low levels.
• Shenzhen inventory months22 monthsAccording to data cited in the report, Shenzhen's inventory destocking pressure remains high.
• Shenzhen 3M26 top three developers by salesCOLI, Shenzhen Investment, CR LandCRIC data shows these three are the top three in total contracted sales in Shenzhen.
• Hong Kong-listed mainland developer overall valuation1FY P/E 8.9x, 2FY P/E 7.7x, 1FY dividend yield 2.7%, 2FY dividend yield 3.0%From the report's valuation summary table.

Impact & implications

Politically, this round of Shenzhen easing helps improve short-term home buying demand and market expectations, and may prompt Beijing to further fine-tune purchase restriction policies to align with Shanghai and Shenzhen. On the investment side, a single city's policy easing may have limited short-term catalyst for property stocks, with real revaluation conditions depending on whether transactions, prices, and sales performance can form sustained improvement. The beneficiary direction is more concentrated among high-quality state-owned developers with high tier-1 city and Shenzhen exposure and better sales performance, as well as related property management platforms.

Risks

• Local-level policy easing may only boost demand for 1-2 months, difficult to form a long-term trend.
• Investors may have already fully anticipated Shenzhen's follow-up easing, leading to a more moderate stock price reaction.
• Shenzhen's inventory months still as high as about 22 months, deleveraging pressure may suppress price recovery.
• If second-hand housing prices cannot continue to stabilize, the market may continue to question policy effectiveness.
• If the judgment that national-level easing is not imminent holds, the industry's overall beta recovery space may be limited.
• Property stocks also face risks such as financing, profitability, deleveraging, valuation compression, and conflict of interest disclosures.

What to watch

• Changes in primary and secondary housing transaction volumes 1-2 months after the new Shenzhen policy.
• Whether Shenzhen's second-hand housing prices continue the improvement trend of about 1% over the past two months.
• Whether Beijing further fine-tunes HPR policies, such as relaxing the number of homes non-locals can buy or tax/payment proof requirements.
• Subsequent local policies such as housing provident fund loan limit increases, mortgage subsidies, accelerated storage, land swaps, or land returns.
• Sales rankings and year-to-date sales performance of COLI, China Jinmao, CR Land in Shenzhen and tier-1 cities.
• Market reaction of property stocks relative to HSCEI 1 day, 3 days, and 5 days after the policy.