A city in the east of the mainland has removed restrictions on home purchases to allow people to buy more properties, underlining increasing pressures on local governments to safeguard their revenues and counter the faltering economy. The government in Jinan in Shandong province started allowing residents to buy more homes from yesterday, regardless of how many they already own, or whether they are registered as residents, a local official said. "The home purchase restrictions have been lifted," the official at the Jinan Housing Administration Bureau said. Economists say the cooling housing market may pose a significant risk to China's economy if conditions deteriorate sharply. Average home prices fell for the first time in May, while new construction starts have tumbled. The loosening of home purchase rules in Jinan follows similar steps taken by Inner Mongolia capital Hohhot two weeks ago, when it became the first mainland city to openly relax housing restrictions. Given the cooldown in the property market and increasing divergence between the local economies in different cities, Beijing has started to give regional governments more room to adjust their property curbs this year. So far, nearly 20 mainland cities have eased home-buying restrictions and made it easier in recent months for buyers to borrow from local housing provident funds. Regional governments depend on the real estate sector for a substantial part of their revenues. Based on average monthly sales volume in the previous three months, Jinan had about a year's worth of unsold new houses at the end of May, according to data from CRIC, a unit of real estate services firm E-House China. New home sales in Jinan dropped 25 per cent in the first six months of this year compared to a year ago, larger than the average decline of 18 per cent in other similar-sized cities. Analysts expect more smaller mainland cities to relax home purchases restrictions in coming months as the property market continues to slow, while large cities, where home prices are still at record highs, are likely to keep the curbs in place.