BEIJINGHONG KONG, Aug 30 Reuters Guangzhou on Wednesday became the first major Chinese city to announce an easing of mortgage curbs as the government ramps up efforts to revive the crisishit property sector and shore up the sputtering economy.

The decision comes as some Chinese stateowned banks are expected to lower interest rates on existing mortgages, three sources familiar with the matter said on Tuesday, in the first such cut since the global financial crisis.

Beijing hopes the reduction in mortgage payments will help revive consumer demand for property. The sector had been a major economic growth driver for years but is now dragging it down amid slowing home sales and a string of defaults by developers.

China39;s mortgage loans totalled 38.6 trillion yuan 5.29 trillion at the end of June, representing 17 of banks39; total loan books.

In a notice, the Guangzhou city government said mortgage curbs would be eased, allowing home buyers to enjoy preferential loans for firsthome purchases regardless of their previous credit record.

The rest of China39;s top four firsttier cities Beijing, Shanghai and Shenzhen could follow suit, together with a dozen secondtier cities which have not eased yet. Many smaller cities have already taken steps to make it easier to buy homes.

Hong Kong39;s Hang Seng Mainland Property Index rose as much as 3.3 after the Guangzhou city government39;s announcement.

The property sector, which accounts for roughly a quarter of the economy, has…