Chinese Vice Premier Li Keqiang on Saturday called for more favorable policies to encourage the construction of affordable housing.

Li made the remarks at a meeting on affordable housing held in Changzhou city of east China's Jiangsu Province.

He reiterated that China would complete construction of 5.8 million units of affordable housing, including low-rent housing, public rental housing and resettlement housing for relocated residents from redeveloped urban shanty towns.

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," he said.

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

For populous cities, construction should focus on public rental housing that provides homes for low- and medium-income families, newly-employed school 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, and those in mining, forestry, and farming areas should build more resettlement housing for relocated residents, he said.

He called on local government to bear major responsibility for affordable housing construction, diversify fund raising channels to obtain more investment, arrange for sufficient land supplies, and ensure 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 Chinese 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 percent growth in June, according to the National Bureau of Statistics.