UPDATE 1-China's southern megacities roll out measures to cool property market

(adds Guangzhou housing policy changes)

BEIJING, Oct 5 (Reuters) - China’s southern megacities of Guangzhou and Shenzhen are the latest centres to impose new measures to cool their overheated real estate markets, including higher mortgage downpayments and home purchase restrictions.

A property boom has given a welcome boost to China’s economy this year, fuelling demand for everything from construction materials to furniture, but a growing buying frenzy is adding to worries about ever-rising debt and risks to the banking system.

The new measures are the latest steps to tighten credit flowing into the property sector as the government tries to balance the need to prevent bubbles while stimulating economic growth.

Prices for new homes in the booming tech centre of Shenzhen rose 36.8 percent from a year ago in August, while Guangzhou’s new home prices rose 21.1 percent over that period, National Bureau of Statistics (NBS) data showed.

Other cities including Chengdu, Jinan, Wuhan and Zhengzhou have already announced new restrictions on property purchases as the government tries to dampen prices stoked by property speculators in second- and third-tier cities across the country.

The average new home price in 70 major cities climbed an annual 9.2 percent in August, up from 7.9 percent in July, according to the National Bureau of Statistics.

Nomura analysts said the new measures were expected to help cool frothy prices in the biggest cities and should prevent the market frenzy from spilling over into smaller cities.

“We also believe it unlikely that the latest tightening measures will cause the bubble to burst, sparking a collapse of home prices. We envision a more likely scenario to be a mild retreat or prolonged flattening of home prices in tier-1 cities,” they said in a note on Tuesday.

First-time home buyers in Shenzhen will face minimum downpayments of 30 percent, but deposits for others will be raised to no less than 50 percent, state news agency Xinhua quoted a government document as saying.

Downpayments for second-home buyers in China’s southern Guangdong province near Hong Kong will be increased to no less than 70 percent, Xinhua said without giving further details.

China’s southern city of Guangzhou has limited local residents to purchasing a maximum of two properties, according to a statement posted late on Tuesday on the Guangzhou government’s website.

Non-local residents will be allowed to buy one property, if they can prove they have paid appropriate levels of tax or social security.

Separately, local media reported on Tuesday that Suzhou in China’s eastern Jiangsu province had unveiled fresh measures steps, including higher downpayment requirements, to cool the housing market.

Reporting by Kevin Yao and Sue-Lin Wong; Editing by Alison Williams and Eric Meijer