A Chinese city that announced a plan to boost its sagging property market on Thursday reversed course three days later, indicating that the central government remains determined to cool the once red-hot market.

The quick policy reversal by Wuhu, a city of 1.5 million people in east China's Anhui province, showed that the central government will not relax its curbs on the real estate market this year, despite a weakening economic outlook.

Last week, Wuhu announced that it would cut taxes on home purchases and offer subsidies to buyers of smaller homes.

Under Wuhu's new policies, the local government would offer subsidies ranging from 50 to 150 yuan (7.9 to 23.8 U.S. dollars) per square meter for purchases of first homes no larger than 90 square meters.

Home buyers with more extensive educational backgrounds or professional certificates are entitled to higher subsidies, a policy that the government has cited as a method to attract more talented workers.

Although the city government insisted that the policies were intended to meet consumers' rigid demands for home purchases and attract talented people to work in the city, concerns still arose, as people worried that more cities would follow suit and lead to a rebound in property prices.

In the face of mounting criticism, Wuhu bowed to pressure on Sunday and posted a short statement saying that it will postpone the implementation of its subsidies and tax cuts in order to "ensure the stable and healthy development of the property market."

The capital market reacted strongly to the postponement. An index tracking property developers' shares on the Chinese stock market fell 0.62 percent on Monday, with China Vanke Co., the country's largest developer by market value, dropping 1.91 percent to close at 7.7 yuan per share.

"The postponement of Wuhu's measures dashed hopes among property developers that the central government would loosen its tightening measures this year to buoy the slowing economy," said Chen Yunfeng, secretary general of the National Real Estate Managers' Association.

A similar postponement was reported in south China's city of Foshan, which in October shelved plans to ease home-purchase restrictions one day after announcing them.

Top Chinese officials have reiterated the need to rein in the property market, as soaring housing prices may add to inflationary pressures and spark social unrest.

Premier Wen Jiabao pledged on Sunday that the government will continue to work to bring housing prices back to "reasonable levels."

To contain runaway home prices, the central government has enacted a slew of measures to regulate the sector, including tighter monetary policies, higher down payments, restrictions on second-home purchases and property tax trials.

Housing inventories in major cities such as Beijing and Shanghai have piled up to a record high, according to 5i5j Real Estate Service Co., one of the country's largest real estate agents.

"Housing inventories will continue to rise during the first half of the year, and sales volumes are expected to reach a new low," said Sun Jianping, an analyst with Guotai Junan Securities Co.

China's home prices fell for a fifth month in January, the longest losing streak since July 2010, according to data from SouFun Holdings Ltd.