Citizens visit a property developer's sales office in Ningbo, East China's Zhejiang Province, on March 4, 2023. Photo: VCG

More Chinese cities are rolling out support measures and easing home purchase curbs as they follow through on the top leadership meeting held last month, which called for the optimization of property policies.

An upturn in China's property sector, which has played a major role in fueling the nation's economic output yet has been on a sluggish growth track over recent years, is expected in the second half of the year as restrictions are eased in more places, propelling the recovery of the world's second-largest economy, experts told the Global Times.

On Thursday, the city of Zhengzhou, capital of Central China's Henan Province, took the lead in announcing measures, including easing curbs on home purchases, reducing the down payment ratio and cutting mortgage rates.

Among the 15 measures, 11 were directly related to home purchases, which addressed the market's primary concerns. The city's move indicated that a nationwide campaign to ease restrictive property policies and offer more support for the sector has begun, Yan Yuejin, research director at Shanghai-based E-house China R&D Institute, said in a note sent to the Global Times.

Some cities rolled out similar measures last year, but they were uncoordinated decisions with no particular targets to resolve restraints on the supply end.

Nanjing, capital of East China's Jiangsu Province, on Friday announced eight measures to stabilize the local property market including increased purchase subsidies.

The housing market has widely welcomed these policy adjustments, and observers expect that second-tier and even first-tier cities will follow suit.

Beijing, Shanghai, Guangzhou and Shenzhen in South China's Guangdong Province, all of which are classified as first-tier cities, vowed to make further efforts in line with their local situations to improve the property market, although no detailed measures have yet been announced. 

"The first-tier cities' gesture of following up and expressing their views in a timely manner indicated that the signal of policy relaxation is becoming clearer and clearer," Yan said.

But considering the robust purchasing power in these cities, loosened curbs are likely to target a group of people in a precise way, in case home prices start to soar again, said Zhang Dawei, chief analyst with the real estate agency Centaline Property.

E-house China R&D Institute studied the impact of a possible policy change by first-tier cities regarding previous mortgages.

Assuming that buyers don't have real estate under their names - regardless of whether they previously had a mortgage - they can enjoy the same down payment ratio and interest rate discount as those who are buying their first homes.

In this case, the down payment ratio can be brought down from an average of 73 percent to 33 percent, and the average interest rate can be reduced from 5.03 percent to 4.5 percent.

 "First-tier cities' poised loosening... will bolster market confidence and accelerate transactions, mitigating the huge pressure faced by the ailing sector," said Yan.

Property investment fell 7.9 percent year-on-year to 5.86 trillion yuan ($819.7 billion) in the first half of the year, according to data released by the National Bureau of Statistics in July.

On Thursday, the People's Bank of China, the central bank, pledged to precisely implement differentiated housing credit policies, meet the reasonable financing needs of private real estate enterprises and promote the sound development of the real estate sector.

"With support measures in the pipeline, including lifting home purchase restrictions in more cities, bringing down residential mortgage interest rates and even moderately reducing the interest rates of existing mortgages, there could be an upturn of property investment and sales in the second half," Wang Qing, chief macroeconomic analyst at Golden Credit Rating International, told the Global Times.

As to financial terms, the five-year loan prime rate (LPR) is likely to be adjusted lower independently in the second half of 2023, according to Wang's outlook.

Most new loans in China are based on the one-year LPR while the five-year rate influences the pricing of mortgages.

Despite the bumpy path of economic recovery since the second quarter, the overall trend of upward movement hasn't been changed, experts said.

"With an array of optimized measures in place, the property sector will soon achieve a soft landing, which is of great significance to stabilizing growth and defusing risks during the remainder of the year," Wang noted.

China's real estate industry is undergoing an adjustment and will face many challenges, such as liquidity issues. However, with the introduction of relevant policies, it is believed that challenges can be overcome in such a huge market, said Wang Shi, one of the best-known people in Chinese business and founder of developer Vanke, in a recent lecture.