China plans to earmark 6.8 billion yuan (US$951 million) in its 2008 budget to build low rent houses for the urban poor, Premier Wen Jiabao said yesterday.

The amount is 1.7 billion yuan or 33 percent more than last year, Wen said.

Local governments will be required to increase funding in this area, he said.

The government will also build more affordable houses and tighten the management of them to ease the housing problems of low-income urban residents, and improve the living conditions of rural migrant workers in cities, the premier said.

A set of tax, credit and land supply measures will be enacted to increase the supply of reasonably priced housing, curb demands for high-end housing and prevent overheating in housing prices, he said.

Given that China has a large population and relatively little land available, Wen said the country has to turn to small and medium condominiums that are environmentally friendly to conserve energy and land.

More land will be provided for such projects, he said.

"We must ensure that the government and the market both play their due roles," the premier said.

The government will give priority to housing for low and middle income families while housing demand among high income families will be met largely through the market, he said.

Attempts to hoard and speculate land and houses will be watched by the authority, he said, "We will deal with violations in accordance with the law."

China's housing prices have soared over the past few years. The average property price in China's 70 large and medium cities in last December was up 10.5 percent from the same month of the previous year, while in Beijing it was up 17.5 percent, according to the National Development and Reform Commission in January.

A recent online opinion poll by Xinhuanet.com indicated that the price of housing was among the "topics of most concern."