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Officials said they hope to increase the number by encouraging more employees to contribute to the nation's public housing fund.

Wang Guangtao, the ministry chief, emphasized that employees are required to pay five to 12 percent of their pre-taxed salaries to the fund, with their employers contributing the same amount.

However, many employees do not contribute to the fund, which is the target group of the ministry's initiative.

In Shanghai, officials anticipate more than 160,000 people will be added to the public housing fund system by the end of this year, said an official with the local public housing fund management center who declined to be identified.

At present, more than 3.2 million people in Shanghai are paying into the fund on a regular basis.

The public housing fund was established in the 1990s following the country's housing reform. The fund is designed to help medium and low-income people to afford their own home. Money collected through the fund can be used to buy homes, and mortgage loans from the fund carry lower rates than commercial loans.

China raised PHF mortgage rates for individual house buyers last year by 0.18 basis points, hoping to help stop housing prices from rising further.

Effective on May 8, the annual interest rate for loans with a maturity of five years or less has been raised to 4.14 percent from 3.96 percent, while mortgage loans with a maturity of more than five years have been set at an annual interest rate of 4.59 percent, up from 4.41 percent, according to the Website of Ministry of Construction, the supervisor of PHF.

Moreover, the ministry also said that the government is planning to increase the supply of mid and low-end residential properties with limits on selling prices.

The ministry will set limits on selling prices and sizes of the units, and require developers to bid on land prices and selling prices under government limits.