(Yicai Global) Aug. 18 -- Kunshan and Taicang, two county-level cities near Shanghai, have lifted restrictions on home purchases by migrants in a bid to revive their real estate markets. But industry sources said the policy relaxation will not have an immediate impact.

Kunshan and Taicang, which fall under the jurisdiction of Jiangsu province’s economically developed city Suzhou, are permitting residents without local household registration to buy their first homes in the cities, sources with local property trading centers told Yicai Global today.

The cities previously required migrants to pay social security for a certain period of time before they could buy a house locally.

To curb an excessive rise in local property prices, Suzhou has implemented a strict housing market policy since 2016. But as the market cooled, the city began to ease the policy, adjusting it several times this year. For example, in May it lowered the social security payment period for migrants to six months from two years.

After implementing the measure, Suzhou’s new home transaction area surged 52 percent from a month earlier to 832,000 square meters in June, according to data from real estate consulting agency Cric. But the trend failed to carry over into the third quarter as the property market entered the off-season. The new home transaction area fell 37 percent in July from June, Cric said.

Homebuyers will be more interested in apartment viewing, but transactions may not improve quickly amid a wait-and-see attitude in view of the current market situation, an industry insider told Yicai Global.

In the first seven months of this year, China’s home sales slumped 23 percent from a year earlier to 781.8 million sqm by area, and plunged 29 percent to CNY7.6 trillion (USD1.1 trillion) by value, official data showed on Aug. 15.

Prices in first-tier cities rose last month from June, but fell in second- and third-tier cities, per the data from the National Bureau of Statistics.

Editors: Dou Shicong, Peter Thomas