The new policies will mainly spur the market for second-hand homes, he said. In first-tier cities like Beijing, the market for second-hand homes accounts for over 50 percent of the overall property market, while in smaller cities it accounts for less than 20 percent, according to Liu.
Liu also noted that supply still far exceeds demand in small cities at present and he said the government is likely to roll out further support policies for the sector in the future.
Overheating unlikely
With demand likely to increase after the easing of the mortgage rules, both transactions and prices are also expected to rise in the next few months.
But analysts expect to see only a moderate increase in housing prices in the future, as there are still large inventories of unsold property.
Dong Liming, a professor with the College of Urban and Environmental Sciences at Peking University, told the Global Times Thursday that the recent support polices will benefit consumers who want to buy better properties or those buying a first home, rather than encouraging speculative demand.
Many local governments have eased housing purchase restrictions since the second half of 2014, but in first-tier cities like Beijing there are still purchasing restrictions in the property sector.
The restrictions are likely to curb investment demand for properties, analysts said. For instance, people still need to pay taxes for five consecutive years in Beijing before they can make a housing purchase.
"Besides, investors now have other appealing channels for their money, such as the stock market," said Liu from Centaline.
'Strongest headwind'
Barclays said in a research note on Wednesday that the real estate market remains the "strongest headwind" for China's growth outlook.
"Although the latest easing of down payment requirements for second mortgages may help to reduce downside risks, the challenge is a combination of high inventory levels in lower-tier cities and reduced investment demand," the note said.
In the first two months this year, investment in the property sector grew by 10.4 percent year-on-year to 878.6 billion yuan, down 0.1 percentage points compared with that in 2014. And sales of residential property during the period dropped 16.3 percent year-on-year to 87.64 million square meters, data from the National Bureau of Statistics showed on March 11.
"Investment in the sector is expected to rise on hopes that transactions will increase with more government support," said Dong, noting that this will ease the current downward pressure in the overall economy.
China's economic growth slowed to 7.4 percent in 2014 and the country has set a target of around 7 percent for 2015.
"Stable growth in investment is crucial for maintaining China's growth momentum," Xu Hongcai, head of the Department of Information under the China Center for International Economic Exchanges, told the Global Times Thursday adding that it will not be easy for China to reach its growth target this year.
