Shenzhen has removed property purchase restrictions in several areas, giving people more choices for buying homes. As of September 6, residents and non-residents with at least a year of social insurance or tax records can buy as many homes as they want in six out of nine districts, including Luohu. Non-residents without proof of insurance or tax records can only buy two homes. In the Yantian District and Dapeng New Area, there are no limits on how many homes someone can own, and no registration or insurance checks are needed.

Regulations Overview

The new rules also change how companies can buy property and adjust mortgage pricing. This is seen as a positive move for Chinese property stocks and local government income, signaling a shift towards relaxing real estate restrictions. This change in Shenzhen is an encouraging sign for the Chinese property market. We should consider buying near-term call options on property-focused ETFs and the Hang Seng Mainland Properties Index. Implied volatility is expected to rise, which makes this trade appealing for both direction and the speed of changes. This easing could also boost overall market sentiment, leading to opportunities in Hang Seng Index futures. It indicates a more aggressive pro-growth approach that might benefit the larger economy. We view this as a potential trigger for breaking through recent obstacles in the market. We are also exploring long positions in commodities linked to Chinese construction activity, especially iron ore and copper futures. This follows data from August 2025, showing that fixed asset investment in real estate development dropped by 9.8% year-over-year. Any signs of a real recovery in construction starts could lead to a rapid increase in these materials’ prices.

Challenges and Considerations

However, we should remember the lessons from the ongoing property crisis of 2022-2024. Past stimulus efforts only provided temporary relief because they did not rebuild buyer confidence. If transaction volumes in Shenzhen do not show a significant and sustained increase in the coming weeks, this rally may be short-lived. A key question now is whether other major cities like Beijing and Shanghai will follow Shenzhen’s lead. We are preparing for increased volatility based on this speculation. If other major cities do not introduce similar measures, the early hope could quickly disappear. This policy change comes in response to very weak data, as national new home prices have fallen for 15 straight months through August 2025. With youth unemployment exceeding 16%, authorities face strong pressure to boost growth. This suggests that the easing measures come from a need for action rather than a sign of strength. Given this uncertainty, a smart strategy would involve buying volatility rather than just picking a direction. We are looking at straddles on major Chinese equity ETFs, which could yield profits from significant price movements in either direction. This allows us to take advantage of the market’s response, whether it’s a wave of optimistic buying or a sharp decline due to disappointing results. Create your live VT Markets account and start trading now.

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