(Yicai) Aug. 30 -- Guangzhou has become the No. 1 first-tier city in China to ease its mortgage policy after the central government introduced a slew of policies to bolster property sales last year.

Guangzhou, a southern city home to more than 18 million people, today introduced a new policy regarding loan applications for first-time home buyers. The main difference is that families that used to own housing but currently do not are eligible to the same benefits as first-time home buyers such as lower interest rates and down payments. 

In the capital city of Guangdong province, the minimum down payment ratio for first-home buyers is 30 percent while others need to pay from 40 percent to 70 percent.

Guangzhou's move is the biggest for a first-tier city when it comes to relaxing the property purchasing policy since 2017, sending out a signal of great significance, according to Yan Yuejin, research director of E-House China R & D Institute. The move will prompt other big cities such as Beijing, Shanghai, and Shenzhen to speed up the introduction of such policies in the near future, Yan added.

Branches of several banks in Guangzhou were still studying the policy. Industrial Bank said to Yicai that it will follow the guidelines of the municipal government. A local branch of a big state-owned bank said that the policy is not implemented yet. “We are still waiting for a notice from the central bank.”

In July, the average price of housing in Guangzhou was CNY40,000 (USD5,503) per square meter, lower than the average of CNY60,000 per sqm in Beijing and Shanghai, according to data from Anjuke. In Shenzhen, the price was as high as CNY70,000 per sqm.

Editor: Emmi Laine