A view of a property project under construction in Hangzhou, Zhejiang province. LONG WEI/FOR CHINA DAILY

By taking the lead among major cities in scrapping all restrictions on homebuying, Hangzhou, capital of East China's Zhejiang province, and Xi'an of Shaanxi province have set the tone in terms of effecting measures that boost market confidence and help the market to stabilize, property experts said on Thursday.

All the previous limits on home purchases in Hangzhou were canceled on Thursday. Non-locals who own residential properties in the city can apply for permanent resident status, said a seven-item notice published on the website of the local bureau of housing security and real estate management on Thursday.

"Hangzhou is the first Chinese city to lift all existing curbs posed on homebuying after April 30, when the Political Bureau of the Communist Party of China Central Committee held a tone-setting conference calling for measures to digest housing inventories and optimize new supplies," said Yan Yuejin, director of Shanghai-based E-house China Research and Development Institution.

"Behind the easing policies are visible home price drops and withered transactions," said Li Yujia, chief researcher at the Guangdong Planning Institute's residential policy research center.

"All of the city's 10 districts reported declines on their average trading prices of pre-owned homes in April, ranging from 2 percent to 21 percent," said Li, citing data from the Beike Research Institute in Hangzhou.

Data from the China Index Academy showed a transaction downturn in the new homes market, suggesting similar measures are needed to activate potential demand.

Hangzhou's bold move may inspire easing in other cities or their districts, especially second-tier cities, that have tight restrictions on home purchases, said Gao Yuansheng, executive vice-president of the China Index Academy's East China region.

Citing data from the China Index Academy, Gao said strict limits are still in place in housing markets across cities like Beijing, Shanghai and Shenzhen of Guangdong province as well as some core districts of cities like Guangzhou of Guangdong province, Tianjin.

Like Hangzhou, Xi'an lifted all its homebuying requirements on Thursday afternoon. The new policy is expected to ease pressure on the city in Northwest China to destock its housing inventories, said Zhang Hongwei, founder of Jingjian Consulting.