BEIJING, July 17 -- Chinese authorities have relaxed their grip on setting real estate service charges, giving agencies greater freedom to set their own fees.

The decision, which took effect on July 1 but was only announced on Thursday, will improve the pricing mechanism of real estate services and facilitate the healthy development of the sector, according to a joint statement released by the National Development and Reform Commission (NDRC) and the Ministry of Housing and Urban-Rural Development (MOHURD).

Previously, the government reined in real estate service fees via a rigid "government-guided price." The new policy gives the market a more decisive role in allocating resources, said the statement.

Each market player is now free to set their own fees concerning legal, technical and consulting work.

The right to fix prices for real estate brokerage services has been delegated to provincial-level governments and local housing bureaus. These authorities can either dictate brokerage service prices to real estate businesses or let the businesses decide their own prices in this area.

The NDRC and MOHURD also urged fair competition among real estate agencies, and asked local price authorities to reinforce supervision and look out for price collusion and fraud.

China's real estate sector plays an important role in the country's macroeconomy and is closely watched by analysts around the world.

However, after a boom period, the sector has cooled since the beginning of the year. The National Bureau of Statistics said on Tuesday that growth of real estate investment slowed in the first half of 2014, represented by falls in both the volume and area of property sold.

In May, new home prices in half of a sample of 70 major cities showed month-on-month drops, contrasted with eight in April. Only 15 cities saw month-on-month increases, substantially down from 44 in April.