BofA China Property: Shenzhen Eases Curbs; Positive Stance Maintained
Summaries are public. PDF access requires an active membership; all members have the same access. Sign in
BofA views Shenzhen's unexpected April 29 announcement easing home purchase restrictions and raising Housing Provident Fund (HPF) loan limits as a proactive, front-loaded policy move. This approach should reinforce the recovery trend across core Chinese cities. BofA maintains its positive stance on the property sector, citing broadly improved housing affordability and the expectation that the sales volume recovery will continue.
The policy package allows local families to purchase more homes in core districts, relaxes residency requirements for non-locals, and significantly increases HPF loan caps. Multi-child families buying their first home can now access up to RMB 3.5 million, up from RMB 2.3 million. Drawing on Shanghai's experience, BofA believes raising HPF loan limits is the most effective measure to unlock first-time buyer demand by directly improving financing capacity and monthly affordability.
Early April data from 30 major cities shows new home sales roughly flat year-over-year, while tier-one cities rose 25% and existing home sales in 15 key cities climbed 9%. Shenzhen previously lagged peers, with new and existing home sales falling 37.4% and 9.5% respectively, making the targeted easing well-timed to narrow the recovery gap with Beijing, Shanghai, and Guangzhou.
The sales recovery is already spilling over into the land market, with recent plots in Beijing, Shanghai, and Hangzhou transacting well above reserve prices. BofA favors high-quality developers with accelerated capital recycling, relative sales outperformance, and visible earnings recovery. Top picks include China Resources Land (12-month target price: HK$43.0), China Overseas Land & Investment (HK$14.5), and C&D International (HK$17.2).
Key exhibits
Exhibit 1
Exhibit 2
Exhibit 3
Exhibit 4
