(Yicai) Sept. 21 -- Southern China’s Guangzhou has relaxed restrictions on house purchases in some of its districts after having eased its mortgage policy less than a month ago.

Families with household registration in Guangzhou’s Yuexiu, Haizhu, Liwan, Tianhe, and Baiyun urban districts can purchase up to two residential properties, according to a notice issued by the city yesterday. Meanwhile, residents without household registration can buy one residential property after having paid social security for two consecutive years.

The new policy also adjusted the exemption period for the value-added tax individuals pay after selling residential properties in many districts of Guangzhou to two years from five years.

Guangzhou implemented curbs on home purchases in 10 districts in October 2010. Since then, families with household registration in the city and those without it who paid social security in the city for five years were allowed to buy only one new home. Moreover, the restrictions set the minimum down payment ratio for second-home buyers to 70 percent.

But at the end of last month, Guangzhou became the first first-tier Chinese city to ease its mortgage policy.

According to the new policy, families that used to own houses but currently do not are eligible for the same benefits as first-time home buyers, such as lower interest rates and down payments. In addition, second-home’s down payment ratio was lowered to 30 percent from 40 percent.

Afterward, other first-tier cities followed Guangzhou’s steps to introduce such policy.

However, the new policy did not receive a warm welcome in Guangzhou. While after its introduction, residential property transactions in Beijing and Shanghai doubled, those in Guangzhou rose by only 20 percent.

Residents’ willingness to buy homes and the expectations regarding an increase in house prices were lower in Guangzhou and Shenzhen than in Beijing and Shanghai after the introduction of the new policy, statistics from the China Index Academy showed.

Guangzhou’s housing supply is very high, its price gap between new and pre-owned homes is small, and the demand for property investment is also relatively weak, so it is not surprising that the city’s real estate market underperformed, according to market insiders.

Guangzhou is the Chinese first-tier city with the largest housing inventory. As of Sept. 17, the number of new houses available for sale in Beijing, Shanghai, and Shenzhen were 86,000, 53,000, and 51,000, respectively, while the figure for Guangzhou was 110,000, data from the China Index Academy showed.

Editors: Zhang Yushuo, Futura Costaglione