HONG KONG (Reuters) - Readily available, cheap mortgages and strong demand are likely to keep China's property market rising, even if restrictions announced in more than a dozen cities over the past week dampen sales and prices over the short term, real estate agents said.
The overheated market is worrying authorities who want to stop price bubbles in higher tier cities, but need to stimulate an economy that is sliding toward its slowest growth since 2009.
In the past six days, 14 Chinese cities imposed administrative restrictions on home purchases to curb property speculation.
The commercial capital Shanghai and Shenzhen, dubbed "China's Silicon Valley" and home to the most expensive property in the country, had led the way in March, bringing in stricter rules that marked the first tightening measures since 2013.
The form and strength of the new restrictions varied from city to city, but included higher mortgage downpayments for second and third time home buyers, in a bid to stem the flow of cash into the red-hot property market.
Central bank data showed that banks in August made 529 billion yuan in household loans, with mortgages accounting for 55.7 percent of that, and policymakers have expressed concerns over rising debt and banks' exposure to mortgages.
Still, market observers, say the measures taken so far were less severe than those seen in 2013, as it remained easy to raise a cheap mortgage.
"Compared to restrictions imposed in 2013, there's still no tightening on mortgage rates this time. The buying cost for home buyers is still at a historical low," Andy Lin, market research director of Hopefluent Real Properties (China) based in Shenzhen, said.
Lin said his company's clients are not first-time homebuyers and can easily afford higher downpayments so the impact was expected to be limited.
The most recent measures also included limiting divorced adults to buying one home in the cities of Shenzhen and Nanjing, after policies saw couples scrambling to divorce - on paper at least - in the hope they could buy a second home.
Speculators searching for the next property hot spot have turned to smaller, inland cities like Changsa during the past few months as prices in major cities became more frothy.
China's average new home price climbed 9.2 percent in August, up from 7.9 percent in July, official data showed. But big cities such as Shenzhen and Xiamen posted much bigger gains at 37 percent and 44 percent, respectively.
Property agents said the immediate impact of the new restrictions had not yet been reflected as many people were travelling during the Golden Week holiday.
In some second-tier cities, such as Hefei where home prices rose 40 percent in August, property agents said the price rises reflected a rush to buy in anticipation that new restrictions would be introduced.
"Panic buying may subside now that the measures are imposed," said Luo Fang Fang, a researcher at property agent Centaline in the city of Hefei, capital of Anhui province.
Analysts said smaller cities that are showing signs of overheating are likely to tighten rules next, but they did not expect a nationwide tightening as the stock of unsold homes in most lower-tier cities remain high.
"Nationwide policy should remain accommodative, because in the next six months the heat in the market must be transferred from ...(major cities) to broader Tier-3 cities," Citi analyst Oscar Choi said in a report this week.
Choi said the market strength needed to spread the smaller cities if the government was to achieve its goal of boosting construction activity, whittling down the stock of unsold homes and developing the satellite cities.
Reporting by Clare Jim; Editing by Anne Marie Roantree and Simon Cameron-Moore