BEIJING, Sept 15 (Reuters) - Guangzhou city has allowed property developers to reduce sale prices of homes by as much as 20% compared with 6% previously, financial news outlet Yicai reported on Thursday, in what would be the biggest cuts allowed by a top-tier city in China.

Chinese local authorities regulate floors and caps for sales in the property sector to avoid sharp fluctuations in price. Most cities set a floor of around 6% for cuts in sale prices.

Guangzhou's new floor applies to the entire city although not every housing development will need to reduce prices by 20% to attract buyers, Yicai quoted a property agent as saying.

Reuters calls to Guangzhou's housing regulator seeking comment went unanswered.

In the first half of this year, only 39,618 new homes were sold in Guangzhou, one of China's four top-tier cities, representing a 35% slide from the same period a year earlier, Yicai said.

More than 200 Chinese cities have taken steps to boost fragile demand this year, including subsidies, smaller down payments, cuts in mortgage interest rate and allowing bigger mortgages.

Recent data shows property sales continue to decline with the sector in crisis. A credit crunch since last year, triggered by tighter debt cap rules, has pushed some major developers into defaulting on bond payments while some some buyers have threatened to stop paying mortgages for unfinished projects.

(Reporting by Liangping Gao and Ryan Woo; Editing by Edwina Gibbs)