Nanjing, a second-tier city in Eastern China, has removed home purchase limits as of 31 March. This development may provide a positive influence on the struggling property market. China Construction Bank has noted a strong recovery in home mortgage applications since the fourth quarter. The bank attributes this rebound to the effective implementation of housing policies. This recent policy adjustment in Nanjing points towards a broader method being tested to stimulate demand in the housing sector. By lifting purchase restrictions, local authorities are attempting to ease entry barriers for would-be buyers, especially those previously sidelined by tight regulations. These limits used to disqualify many based on residency, homeownership history, or tax requirements. Now that they’ve been set aside, more transactions could flow through the system. Wang, a senior economist with the bank, described the shift in application volumes for mortgages as a welcome change from the downward movement seen earlier in the year. Analysts across several institutions had been watching for signs of turnaround, and this marked jump in lending requests since late last year supports the view that households may be stepping off the sidelines. This is not necessarily a reflection of broader confidence returning in full force, but it does suggest that policy tweaks are doing what they were designed to—attract immediate interest and capital back into the sector. We believe this move should be interpreted as both reactive and calculated. Policymakers are adjusting to flagged concerns relating to liquidity pressures among developers and the wider challenge of unsold inventory. With liquidity tightening across other channels, easing restrictions on the demand side becomes a softer lever to pull in order to keep money circulating. From a data point of view, higher mortgage filings mean there’s more room for structured financing activity. Short-dated products tied to housing market sentiment will need closer hedging. The improvements in mortgage-related volumes are largely skewed towards low-to-mid tier cities, based on recent disclosures from at least two large lenders with exposure to those regions. Traders with exposure to real estate-backed instruments should model risk premiums accordingly, based on assumptions tied not only to rates but also to regional inflows and demographic movements. It’s also worth watching how pricing mechanisms adjust in secondary markets, given increased buyer interest. As local governments add clarity on tax rebates or preferential mortgage rates, that could impact forward-looking valuations and implied volatility in the property-linked swaps market. We’ve seen a slight tightening of spreads linked to property developers with active footprints in these cities, and there may be more convergence on those curves if similar restrictions are dropped in other provinces. Behaviours seen among longer-term interest rate traders signal that pricing direction is gradually taking into consideration a new floor in housing-related credit scatter. Participants holding instruments that depend on stable mortgage pipelines may want to reassess sensitivity to regional policy upticks, which are unlikely to arrive uniformly across tiers. Instead, the changes will appear one by one, with headline policy shifts followed by smaller regulatory nudges. Pei and her team at the bank credit the mortgage rebound to improved internal policy uptake, not necessarily macroeconomic changes. While credit conditions remain somewhat patchy in verticals like construction, housing has shown consistent throughput since the first wave of support measures late last year. That gives structured product desks more confidence in releasing new tranches with slightly better terms, assuming continued follow-through. The pattern is now one of movement towards transaction-led recovery rather than pure asset revaluation. Our expectation is that the coming weeks will bring more region-specific changes which may affect secondary pricing in credit securitisations. Traders should recalibrate models where property is a material sensitivity. اکنون تجارت را شروع کنید – برای ایجاد حساب VT Markets زنده خود اینجا را کلیک کنید