Jinan becomes latest Chinese city to relax home purchase rules

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.