(Yicai) May 6 -- Shanghai is following Shenzhen and a number of other Chinese cities by introducing a trade-in program for homes in a bid to give the local property market a lift.

Residents planning to sell their old homes for newly built ones can get a refund on the new property if they cannot sell up within a certain period, according to a proposal made by the Shanghai Real Estate Trade Association and the Shanghai Real Estate Broker Trade Association on May 3. They also suggested discounts to help people buy new homes.

Over 40 cities, including Shenzhen, Nanjing, and Zhengzhou, have brought out trade-in programs since last year. They help buyers in a number of ways, including through direct purchases, intermediary cooperation, and subsidies, reducing the selling cycle for old homes and thereby stimulating demand for upgrades. More cities are expected to follow suit.

Shanghai’s move will help to clear bottlenecks in the real estate market, promote smoother market circulation, and boost the high-quality development of the property market nationwide, said Yan Yuejin, research director of E-house China Research and Development Institute, a think tank.

More than 20 property developers and 10 real estate brokerages will participate in the initial phase of the trade-in scheme, involving 30 property projects located in Shanghai’s suburban districts of Jiading, Songjiang, Qingpu, Fengxian, and Lingang.

Nearly 1,240 new builds priced at between CNY36,000 and CNY56,500 (USD4,990 and USD7,830) per square meter have already been included in the scheme as of yesterday, according to Alipay’s mini-program Leju Huanxingou.

Editor: Futura Costaglione