China will consider establishing a policy-based financial institution for residential housing to cater to the country’s relatively resilient housing demand, according to the top economic regulator.

The nation will come out with measures that will have long-term effects on the property sector and establish an institution for residential housing finance, according to the draft plan for national economic and social development released by the National Development and Reform Commission, the country’s top economic regulator, on March 5.

The plan comes at a time when the central government is looking to curb speculative behavior in the housing market, tighten credit to curb risks and meet the “rigid” but solid residential housing demand of first-time buyers.

New loans for home purchases are expected to rise by around 2 trillion yuan ($315.5 billion) a year in the near future, but the new loans that would be issued through the housing provident fund scheme, which is the major measure in China to reduce costs for buyers, would be only 1.1 trillion yuan a year, according to a recent report from the National Institute of Finance and Development, a government think tank.

Li Ruoyu, an economics researcher with the State Information Center, said there is a policy gap to be filled for people planning to purchase houses, especially from the low-income sector.

The idea was first raised by the nation’s top policymakers in November 2013, but the progress has remained rather slow, with no further details on its duties or timeline revealed afterward.

Yan Yuejin, research director at the E-House China R&D Institute, said the national level financial institution is expected to offer policy support for homebuyers at a macro level, unifying policy standards introduced at local levels.

Some cities have introduced pilot programs that allow first-time buyers to win new home purchase bids.

More policy support would help residents who actually need homes, especially at a time when interest rates are relatively high, he said.

The financial institution could also bring some good news for the financial market, as it might promote mortgage-backed securities in the future — products through which banks package mortgages into securities and sell them to investors, according to Cao Yuanzheng, chief economist of Bank of China International Holdings.

Though absence of such products had helped China to avoid one of the systemic causes of the property crash earlier, “the nation still needs such products, considering the stable returns and how it could help banks to mobilize assets and free up capital for lending,” he said.

Echoing his remarks, Li from the State Information Center said, investors would have strong interest in such products as are backed by a national-level institution.