Illustration: Chen Xia/GT

Local officials in Hangzhou, Zhejiang Province, announced to loosen home purchasing restrictions in certain parts of the city on July 28, marking another step toward dismantling policy holds on China's cooling urban housing market. Specifically, earlier curbs were repealed on home sales in Xiaoshan and Yuhang districts, and for residential properties larger than 140 square meters in the city center.

As many know, Hangzhou's real estate market was among the first to experience price and turnover declines as housing supplies surged ahead of demand. With time, other cities started suffering from the imbalances; and before long officials in second- and third-tier cities were rescinding control policies originally designed to rein in speculation. By the end of last week, of the 46 cities which had imposed purchasing limits, 34 have taken steps toward repealing them over recent days.

This recent policy shift has been broadly described as an attempt by local authorities to revive flagging home sales at a time when economic reforms are putting the brakes on China's tried-and-true growth engines. But will regional authorities hit their apparent targets?

Over the short-term, the relaxation of earlier curbs may offer some help balancing supplies with demand. As has been well-documented, years of booming growth in China's real estate market have created a property glut, which many cities and developers are now desperately trying to cope with. According to data from DTZ, a property advisory firm, more than 4.6 billion square meters of residential property have been built around the country since 2011, however only 3.43 billion square meters have been sold over the same period.

Looking further into the future, it is still too early to say whether recent relaxations will bolster market activity. In all likelihood, the problems plaguing China's real estate sector may prove impervious to administrative controls or interventions. By the same token, the relaxation of earlier policies will do little to alter the fundamentals of the market.

Let's take Hangzhou as an example. According to information from DTZ, 85 residential housing units were sold in downtown Hangzhou Tuesday, the day after local authorities announced their policy relaxations, up 31 percent from the previous day. Meanwhile, in the city's Xiaoshan district, turnover declined from 32 units to just 15 units from one day to the next.

More broadly, market transactions in Hangzhou totaled 28,606 units during the first half, down 32 percent from the same period in 2013, according to data from industry portal Soufun. In comparison, combined home sales volumes in 38 major urban markets tracked by Soufun dropped by 17.85 percent year-on-year to 1.06 million units during the first six months of 2014. Meanwhile, 112.02 million square meters of floor space were sold in the 38 cities over the same period, down 19.53 percent.

For prospective buyers looking for a place to live, is this a good time to purchase a house? Ultimately, how this question is answered will determine what happens next in the broader market. For those who believe that the continued relaxation of housing restrictions will ultimately drive prices higher, this is an excellent time to buy. Others though may decide to hold out for further price drops and clearer policy signals from the government. The situation becomes even more complicated for buyers in first-tier cities, where authorities have shown no intention of easing curbs. In fact, municipal leaders in Beijing have said they would rather sacrifice economic growth than scale back purchasing restrictions.

Numerous experts have appealed to the government to let the dynamics of supply and demand take the lead in adjusting the property market. Such calls have only grown louder over recent months amid sagging prices, dwindling sales and mounting concern over vacant housing stocks. At the very least, the government should be very cautious about implementing more administrative measures to control the market.

Right now, it is becoming increasingly clear that the market is settling in for a prolonged period of adjustment, regardless of whatever the government does - or doesn't do. Property developers should look for opportunities to cut their losses and maintain their share in the market. For instance, if demand starts to recover as policy curbs evaporate, developers should offer discounts and incentives as a way to shore up their cash flows. Or, if sales continue to weaken, developers should focus on delivering homes that match home purchasers' real needs.

The author is a reporter with the Global Times. bizopinion@globaltimes.com.cn