(Yicai) Oct. 10 -- Hangzhou is canceling the price ceiling on newly built homes and Chengdu is offering residency status, also known as hukou, to anyone who buys a new or pre-owned apartment in the city as the two Chinese provincial capitals take bold moves to revitalise their real estate markets.

Hangzhou is removing price caps on newly built residential properties, the government of the capital of eastern Zhejiang province said yesterday. Previously, the metropolis imposed a ceiling on the price of new apartments, squeezing the amount of profit that developers could make.

The lifting of price restrictions will totally transform Hangzhou’s real estate market, an insider at a Hangzhou developer told Yicai. Developers must have the leeway to build better apartments so as to sell at a higher premium.

Doing away with the price restrictions will cement the expectation that house prices in the city will stabilize, said Yan Yuejing, deputy director at think tank Shanghai E-house Real Estate Research Institute. For developers, it means new opportunities. Local developers are likely to go on a land buying spree.

Chengdu is offering residency status, also known as hukou, to anyone who buys a new or pre-owned apartment in the city, the government of the capital of the southwestern province said yesterday. The hukou will be extended to the buyer’s spouse, children and elderly parents. However, a timeframe of when the policy will come into effect was not given.

Chengdu’s population has swelled by over six million people in the 10 years from 2012 and 2022 as the city puts a strong emphasis on luring scientific and technological talent from other parts of the country.

To offer residency status with the purchase of an apartment is huge, and this is expected to greatly propel the real estate market forward, an expert in the property sector said.

New homes sales in Chengdu surged 81 percent over the week-long National Day holiday that ran from Oct. 1 and Oct. 7 from the same period last year at 1,561, according to data from Chengdu's realtor association. On average, 223 new houses changed hands per day over the period, six times the number before the break.

Editors: Shi Yi, Kim Taylor