(Yicai Global) April 28 -- Nanjing, the capital of eastern China’s economically developed Jiangsu province, has surreptitiously relaxed some restrictions on home purchases in place since 2017 in an effort to stem the slide in local real estate sales.

Except for some sectors, restrictive policies are no longer valid in most areas of downtown Qixia district, staff at the district’s housing bureau confirmed to Yicai Global. But the changes have not been set out in any official document.

Recent rumors said Nanjing has begun to implement a more relaxed policy on house buying qualifications and home loans. For example, residents with Nanjing ‘hukou’, or household registration, can buy a third apartment in some areas, and non-Nanjing ‘hukou’ holders can buy a flat if they have paid social security premiums in the city for six months. In addition, mortgage interest rates will no longer be linked to whether the buyer already owns local property.

Staff at the Nanjing housing bureau said no documents reflecting such a policy shift have been issued yet. But buyers “can directly make a purchase as long as they can get a qualification certificate for buying a house.” And, it is up to banks to decide whether to adjust the mortgage rate and down payment ratio, they told Yicai Global.

According to policy in force since 2017, households with Nanjing ‘hukou’ can buy up to two apartments downtown, while non-residents need to have paid social security or income tax in two of the past three years to do the same.

This is the second time that Nanjing has effectively relaxed housing market curbs this month. Already in mid-April, non-resident buyers did not need to submit papers proving social security or income tax payment when they bought their first apartment in the districts of Liuhe and Lishui.

The sluggish local property market lies behind the easing. According to data from China Real Estate Information, the transaction area of new and lived-in homes in Nanjing fell by 26 percent and 48 percent respectively in the first quarter from a year earlier.

The new measures have significantly lowered the threshold for people without a Nanjing ‘hukou,' which is expected to release a wave of home buying, Yu Xiaoyu, research director at Eh Consulting, told Yicai Global.

But for the market to sustain a recovery, adjustments to existing policies that hold back home loans are also needed, Yu added. Like, for instance, no longer implementing differentiated or higher mortgage rates on people who already own other properties in the city.

Editors: Tang Shihua, Peter Thomas