Shanghai has relaxed its property buying regulations as part of a broader effort by local governments across China to address a severe real estate crisis that is negatively impacting the economy.

In an effort to curb soaring property prices and rampant speculation, many Chinese cities imposed stringent restrictions and credit requirements on home purchases over a decade ago. However, these policies are now being reversed to counteract the economic slump caused by a debt crisis among developers, low demand, and falling property prices.

On Monday, Shanghai, China's largest and wealthiest city, announced a reduction in the residency requirement for property buyers. Previously, individuals needed to live in the city for five years before being eligible to purchase property, but this period has now been cut to three years. Additionally, the city has reduced the minimum down payment for commercial housing mortgages to 20 percent and will now allow families with two or more children to buy an additional home.

These changes in Shanghai follow similar measures implemented in other major Chinese cities such as Hangzhou and Xi'an, which have also reduced purchase restrictions for first-time buyers this month.

The central government has taken steps in recent weeks to mitigate the crisis in the property and construction sectors, which previously accounted for a quarter of China's gross domestic product. Earlier this month, Beijing lowered the minimum down payment rate for first-time homebuyers to a historical low and proposed that the government could purchase unused commercial real estate to help alleviate the surplus.

Details on the number of properties the government plans to buy have not been provided. These policy adjustments reflect a significant shift in the government's approach to managing the real estate sector and stabilizing the economy.