Top authorities are calling for more favorable policies to encourage the construction of affordable housing to curb the speculation in the housing market.

Vice-Premier Li Keqiang pledged that China would complete construction of 5.8 million units of affordable housing, speaking at a Saturday meeting on affordable housing in Changzhou city of east China's Jiangsu Province. That total will include low-rent housing, public rental housing and resettlement housing for relocated residents from redeveloped urban shantytowns.

In May, the Ministry of Housing and Urban-Rural Development signed an agreement with local governments nationwide to build 5.8 million units of affordable housing.

"Meanwhile, measures should be taken to increase the supply of commercial housing to meet people's reasonable needs of housing consumption," Li said.

Local governments should adopt a realistic approach to affordable housing construction and plans should be based upon local needs, he said.

For populous cities, construction should focus on public rental housing that provides homes for low- and medium-income families, newly-employed graduates and migrant workers, he said.

Additionally, the governments in cities with large numbers of low-income families should speed up construction of low-rent housing. Those in mining, forestry, and farming areas should build more resettlement housing for relocated residents, he said.

Li called on local governments to bear the major responsibility for constructing affordable housing, diversifying fund-raising channels to obtain more investment, securing sufficient land, and ensuring transparency and fairness in the distribution of affordable housing.

He reaffirmed the policy that regulates the housing market and resolutely cracks down on speculative property investment and other unreasonable market demands.

In the face of skyrocketing housing prices, the government has ordered a stringent credit policy to restrict speculative purchases and has increased spending to build affordable housing.

Housing prices in major Chinese cities rose 10.3 percent year-on-year in July, slower than the 11.4 percentage growth in June, according to the National Bureau of Statistics.

This year, the central government has expressed a strong determination to control the country's soaring housing prices, followed by a series of strict policies and actions on regulating the real estate market.

On March 11, the Ministry of Land and Resources issued a directive, saying developers must submit a 50 percent down payment on all land they buy at auctions within one month of signing a contract, or they will lose the land along with their deposit.

On March 18, the State-owned Assets Supervision and Administration Commission of the State Council ordered 78 central State-owned enterprises to quit the housing market.

Since March, a five-month campaign across the country is being carried out to crack down on land hoarding.

In August, the Ministry of Land and Resources also reported that a total of almost 11,000 hectares of land, equal to 13,750 football fields, have been left idle across China while a land shortage is blamed for soaring housing prices. Some of the land was taken back by local governments, the ministry said.

(China Daily August 23, 2010)