A potential homebuyer checks out a property project in Hangzhou, Zhejiang province, Dec 17, 2016. [Asianewsphoto by Long Wei]

HANGZHOU - Authorities in the eastern Chinese city of Hangzhou on Thursday unveiled more steps to restrict housing purchases in a bid to cool down the property market.

Hangzhou bureau of housing security and management announced that as of Friday, people without local "hukou" (permanent residence permits) need records of two years of income tax and social security payments made in the last three years if they want to buy a house there. Currently they only need to have paid for one of the previous two years to be eligible.

Those with local hukou are to be banned from buying third homes.

The bureau also expanded the ban to cover two more districts. Since the city resumed housing purchase restrictions in most of its urban areas in September 2016, large number of home buyers bought houses in Fuyang and Dajiangdong districts. Non-local buyers made more than 40 percent of purchases in Dajiangdong in the past three months, according to tmsf.com, a Hangzhou-based housing market research institute.

Similar purchase restrictions have been introduced in Shenzhen, which borders Hong Kong.

Second-home sales in Shenzhen slumped 37.7 percent month on month, or 71.4 percent year on year, to 242,085 square meters in February, according to the city urban planning, land and resources commission.

Despite the decline in sales, the average prices remained resilient, edging up 0.7 percent month on month to 54,500 yuan ($7,900) per square meter.

Wang Feng, head of the Shenzhen real estate research center, said further tightening measures were expected, and prices in Shenzhen would likely fall about 5 percent in the first half of the year.

But in the mid- and long-term, the Shenzhen market will continue to boom, said Wang.