Shanghai Commercial Real Estate Minimum Down Payment Reduced to 30%, Reporter Investigation Finds: Banks Have Varying Implementation Timelines, Comprehensive Approval Required Based on Purchase Location and Income Situation

The Daily Economic News Reporter | Li Yuwen The Daily Economic News Editor | Bi Luming

On March 16, the Shanghai headquarters of the People’s Bank of China published a notice titled “Shanghai Adjusts Minimum Down Payment Ratio for Commercial Property Purchases” (hereinafter referred to as the “Notice”). The Notice states that starting from March 16, 2026, the minimum down payment ratio for commercial properties (including “commercial-residential mixed-use properties”) in Shanghai will be adjusted to no less than 30%. The Notice also mentions that local banking financial institutions should reasonably determine the specific down payment ratio for each loan based on their operational conditions, customer risk profiles, and other factors.

On March 17, a reporter from The Daily Economic News visited multiple bank branches and loan departments in Shanghai as a homebuyer and found that different banks are implementing this policy at varying speeds. Some banks have already adjusted the minimum down payment ratio for commercial properties to 30%, but emphasize that specific loans will still be evaluated comprehensively based on the purchase area, the borrower’s credit history, employment status, and other factors. Several other bank branches stated they have not yet received any related notices.

Additionally, according to the reporter’s understanding, most banks in Shanghai are currently offering commercial property loan interest rates at the LPR + 60 basis points for terms over five years, which is approximately 4.1%.

Implementation Progress Varies Among Banks; Some Branches Have Not Yet Received Notices

“Yesterday (the 16th), the notice (regarding the minimum down payment ratio) was issued, setting it at 30%. We have seen that, but the specific commercial property loans still need to be assessed based on the purchase area, the borrower’s credit situation, employment stability, and other factors,” a customer manager at a branch of China Construction Bank told the reporter. The bank has already implemented the 30% minimum down payment ratio in accordance with the policy, but current approval processes are more stringent. “From a cautious perspective, we generally still prefer a 50% down payment.”

The customer manager explained that the maximum loan term for commercial properties is 10 years, and the interest rate is also subject to an increase, which results in higher monthly repayment pressures compared to residential mortgages. Therefore, multiple factors need to be considered comprehensively. He admitted that based on previous clients who applied for commercial property loans, many do not meet the qualifications for a reduced down payment.

An employee at a branch of Industrial Bank also stated that approval requirements for commercial property loans are relatively stricter. “For example, when purchasing shops, the property must be a standalone ground-floor shop along the street, and the borrower’s repayment ability is also important. The monthly repayment-to-income ratio should not exceed 50%.”

Compared to residential mortgages, commercial property loans are not the “mainstream” in bank lending. During the reporter’s inquiries, many bank branches said they do not handle such business, and even branches that do have related services are doing so sparingly. Some branches stated they have not yet received notices regarding the down payment ratio adjustment.

“The policy to lower the down payment ratio to 30% was just issued, and we haven’t received any notice yet. We do this business infrequently,” a staff member at an Industrial Bank branch said. If someone applies now, whether the 30% down payment policy will be implemented needs to be approved by the head office.

A loan department staff member at a branch of Shanghai Pudong Development Bank also mentioned that they noticed the policy issued yesterday (the 16th) to adjust the down payment ratio for commercial properties, but the bank has not yet received any related notices. “We handle commercial property loans very rarely now, and we haven’t received any notices. We haven’t seen any related information in group chats either. If the policy is not yet implemented, we will continue to follow the original ‘50% loan, 50% down payment’ approach.”

Many Regions Have Already Adjusted the Minimum Down Payment for Commercial Properties to 30%

In January this year, the People’s Bank of China and the China Banking and Insurance Regulatory Commission issued a notice that adjusted the minimum down payment ratio for commercial property (including “commercial-residential mixed-use properties”) purchases to no less than 30%. They also required provincial branches of the People’s Bank of China and local offices of the China Banking and Insurance Regulatory Commission to determine the minimum down payment ratio for each city within their jurisdiction based on local government regulation requirements, following the principle of city-specific policies, on the basis of the nationwide minimum.

Subsequently, Inner Mongolia, Sichuan, Shandong, Guangdong, Jilin, Chongqing, and other regions announced adjustments to the commercial property down payment ratio to 30%. The Shanghai adjustment is also implemented in accordance with the above notice.

Wu Zewei, a special researcher at the Shanghai Commercial Bank, told the reporter that this adjustment of the minimum down payment ratio for commercial property loans in Shanghai signifies a targeted optimization of real estate market regulation policies. The core significance lies in lowering the purchase threshold for commercial properties, releasing reasonable demand, and effectively revitalizing existing commercial and office properties, thereby promoting healthy and sustainable development of the real estate market. This move helps stabilize market expectations and boost confidence among relevant participants.

“At the same time, the policy emphasizes that financial institutions should implement differentiated pricing based on their own operational and customer risk profiles. This reflects an effort to activate the market while still prioritizing risk prevention, requiring banks to carefully evaluate during implementation to support reasonable home buying needs while maintaining financial stability, and guiding funds to serve the real economy more efficiently,” Wu Zewei said.

Cover image source: Daily Economic News