SHENYANG - Shenyang, capital of Northeast China's Liaoning province, has been making headlines after relaxing home purchase restrictions in the city.

Since Tuesday, news about scrapping restrictions has been circulating on cyber space. Although the city government denied any truth to Xinhua, local insiders said Shenyang loosened policies about two weeks ago.

According to real estate agents, every couple used to be allowed to buy two houses. Now, both husband and wife can buy two homes each.

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The threshold for a person without a Shenyang hukou to buy a home has also been lowered. A person is now required to provide proof of tax or social insurance payments for at least three months in the city before buying a property. Previously, a potential buyer needed at least one year's tax or social insurance payments.

Hukou, or household registration system, ties access to basic local welfare and public services to one's place of residence.

Analysts said the slowing down of home sales and high housing inventory forced Shenyang to make changes.

According to E-House China R&D Institute, a research firm in Shanghai, housing inventory in Shenyang reached 18.28 million square meters by the end of May, up by 28 percent from the same period last year.

Wan Nan, general manager of the Shenyang branch of the real estate information provider CRIC, said the loosening of restrictions will have a significant effect on inventory.

Although the central government has not given a greenlight to loosening home buying limits nationwide, Shenyang and other cities have relaxed restrictions in response to the cooling property market.

According to real estate agent Centaline Property, besides Shenyang, 16 cities in eight provinces have relaxed restrictions since the second half of last year.