(Yicai) Jan. 29 -- Guangzhou, the capital city of southern Guangdong province, has become the first Chinese first-tier city to lift purchase restrictions on houses with an area of over 120 square meters.

All residential properties larger than 120 sqm, both newly-built and second-hand ones, will be exempted from purchase restriction measures, Guangzhou announced on Jan. 27. Moreover, owners of houses smaller than 120 sqm can buy a new one if they register their home for rent at competent government agencies or obtain a code at the city’s stock house trading system.

Last September, Guangzhou relaxed house purchasing curbs by allowing families with household registration in Yuexiu, Haizhu, Liwan, Tianhe, and Baiyun urban districts to purchase up to two residential properties. Meanwhile, it allowed residents without household registration to buy one residential property after having paid social security for two consecutive years.

The new policy will promote the house purchase demand in Guangzhou to improve house conditions, said Li Yujia, deputy director and chief researcher at the Guangdong Housing Policy Research Center. The policy is in line with the tendency of residents in the city center to have a high demand for improved housing conditions, Li added.

A senior sales agent in Guangzhou told Yicai that the new policy actually lifts all restrictions on house purchases because all residents can qualify to buy a new house if they put the one they own for sale or rent.

Guangzhou had over 12.3 million sqm of houses for sale as of the end of last year, down 8 percent from a year earlier, according to statistics from real estate research institute CRIC Research Center. Despite the decline, selling all these homes would still take nearly 20 months, so the pressure remains strong, CRIC Research Center noted.

“Guangzhou doesn’t have many areas with home purchase restrictions and has loose policies for household registration, so the new policy is expected to only slightly boost sales in the city’s core areas,” a real estate industry insider said.

However, from a broader perspective, Guangzhou becoming the first Chinese first-tier city to relax house purchasing policies this year makes industry insiders have more optimistic expectations for other cities to follow suit, said Yan Yuejin, research director of the E-House China Research and Development Institute.

After this move, it is more likely that the other first-tier cities -- Beijing, Shanghai, and Shenzhen -- will ease their policies, raising market expectations for further adjustments in house purchase curbs, Yan noted.

Editor: Futura Costaglione