China's central bank on Monday lowered minimum downpayment levels on second homes nationwide, scrapping a key policy originally aimed at controlling housing prices as it seeks to boost the economy.

The People's Bank of China (PBoC), the central bank, said the minimum deposit for individuals buying additional housing would be set at 40 percent, according to a statement on its website.

The level was previously 60 to 70 percent, China's official Xinhua news agency said.

The PBoC said the move was aimed at "supporting residents' home ownership and improving housing demand".

The announcement rolls back a four-year-old policy first introduced to try to cool the then red-hot property market as rocketing prices put homes out of the reach of many, raising worries over social unrest.

The move comes as China's growth falters, leading to widespread expectations that policymakers will have to boost the world's second-largest economy through further monetary loosening.

China's gross domestic product grew 7.4 percent last year, the slowest in nearly a quarter of a century.

The central bank has already cut interest rates twice since November and in February it also lowered the bank reserve ratio -- the percentage of funds banks must hold in reserve.

Property investment is a key driver for China's economy, while land sales are a major source of revenue for cash-strapped local governments, which have been feeling the pinch as the economy has slowed.

"The cut (in down payments) will strongly support the property market... especially in first- and second-tier cities," Le Jiadong, a property analyst at Guangfa Securities, told AFP.

"Introducing this policy at this time fits the situation of the property market's development," he said, adding expectations had been for the government to cut the downpayment level to 50 percent.

China's housing prices fell in February, with the average price of a new home in China's 100 major cities edging down 0.24 percent from January to 10,539 yuan ($1,682) per square metre, according to the China Index Academy.