Bans on non-residents buying property will be lifted in Nanning, the Guangxi Zhuang autonomous region, the first crack in the three-year nationwide restrictions on housing sales.

More cities are likely to loosen restrictions as cash-strapped local governments are eager for revenue from land auctions and sales taxes to finance projects, experts said.

Changes may be seen in smaller cities while major cities such as Beijing and Shanghai will have to keep their restrictions, industry specialists say.

"Regional divergence could be more obvious this year," said Li Enping, an associate professor at the Institute for Urban and Environmental Studies under the Chinese Academy of Social Sciences.

According to real estate statistics provider Soufun, housing prices rose 20 percent year-on-year in March in China’s four top cities — Beijing, Shanghai, Guangzhou and Shenzhen. But they only rose by 7.7 percent on average in second-tier cities, mainly provincial capitals, and 3.9 percent in third-tier cities.

Such low aggregate growth rates may indicate that the price level in some cities may have been declining.

Zhu Baoliang, a senior economist at the State Information Center, a government think tank, said restrictions could be removed in small cities where prices have dropped steeply.

"But the chance is slim for lifting the restrictions in first-tier cities," he said.

The country’s real estate market cooled amid a strong wait-and-see sentiment in 2014. According to the National Bureau of Statistics, fewer cities have reported price increases. In March, 56 of 70 major cities saw prices rise, the lowest level since January 2013.

"As the real estate sector accounted for nearly one-fourth of fixed-asset investment, balancing real estate tightening and the slowing economy will not be an easy task," said Li Yang, vice-president of the Chinese Academy of Social Sciences.

China’s GDP growth in the first quarter slowed to 7.4 percent. Slowing real estate activity is believed to be an important factor dragging down the overall economy.

On Tuesday, the China Banking Regulatory Commission warned against credit risks in the real estate sector.

But, Li said, "so far, the financial risks of a home price correction are manageable."

Huo Yan and Luo Min contributed to this story