Chongqing city plans to subsidise mortgage payments for first-time property buyers frozen out of the market by soaring prices. Analysts said the move would encourage sales but would not drive up prices because the programme targeted lower-income earners. They said the programme was part of a 10-point package unveiled in May. Under the scheme announced by the city's finance bureau on Wednesday, residents would qualify for subsidies for first-home purchases if they paid personal income tax. The amount of the subsidies would not exceed 40 per cent of the buyer's tax payments, and the subsidies' total could not exceed 30 per cent of the total home value. 'Policy like this will definitely encourage more sales transactions,' Alan Chiang, head of residential for China at DTZ, said. 'But I do not think it will drive price rises, particularly in Chongqing where there is abundant new supply. The luxury sector is driving price rises.' The government first outlined its plans to help low-income earners in May when it launched its 10-point tightening measures to cool the city's housing sector, according to Lee Wee Liat, regional head of property research of Samsung Securities. He said this week's notice merely clarified the May directive, adding that the notice was in line with the central government's policy of promoting first-time home buyers, but penalising second or third purchases. However, Lee expects more tightening of the market, with the Chongqing government's 10-point programme also signalling further measures, including the introduction of a property tax. 'Our bet is there needs to be more follow-through tightening measures to prevent property price from going up again,' he said. Sales in terms of gross floor areas in 10 major mainland cities during the week of September 6 to September 12 rose 6.8 per cent from the previous week, according to CCB International Securities. Most first-tier cities continued to see sales volume rebound, with Guangzhou up 36.4 per cent from a week earlier, Shenzhen up 21.8 per cent and a 10.6 per cent rise in Beijing. Shanghai saw a 5.5 per cent decline from the previous week.