Beijing Pushes for Expansion of Home Leasing Market in China’s Major Cities

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The central government has issued a call for the expansion of housing rental markets in China’s leading metropolises, in order to address surging property prices and a shortage of urban housing as more and more rural citizens migrate to the cities.

Many of China’s major cities are in urgent need of new housing supply, given the country’s ongoing urbanisation drive and vast inflows of migration from the rural countryside.

A recent report by the Xinhua News agency estimates that China’s “floating population” could be as high as 245 million, while each year approximately 7 million new university graduates join the workforce.

This huge demographic shift is generating immense demand for accommodation in the cities, and placing a severe strain on the housing supply, as well as existing physical and policy infrastructure.

In order to address these issues, on 20 July China’s Ministry of Housing and Urban-Rural Development issued the “Notice Concerning Accelerated expansion of the Residential Lease Market in Large and Medium-sized Cities with Net Population Inflows” (关于在人口净流入的大中城市加快发展住房组令市场的通知) in conjunction with a total of nine departments including the National Development and Reform Commission.

The “Notice” requires that large and medium-size municipalities seeing net population inflows provide support to the the “conversion of relevant state-owned enterprises into residential home leasing enterprises, in order to make full use of the guidance and leadership role of state-owned enterprises when it comes to stabilising rent and lease terms, actively stimulating the use of housing inventory for leasing purposes, and increasing the effective supply of residential housing for lease.”

MOHURD has reportedly worked with other central government bodies to select a total of twelve Chinese cities for the first round of residential leasing policy trials, including Guangzhou, Shenzhen, Nanjing, Hangzhou, Xiamen, Wuhan, Chengdu, Shenyang, Hefei, Zhengzhou, Foshan and Zhaoqing.

A number of municipal governments have already issued their own home leasing policies in anticipation of the MOHURD notice.

At the start of July Shanghai issued its “Shanghai Housing Development ’13th Five Year Plan'”, which proposed that 700,000 new rental homes be created by the end of the decade, while on 17 July Guangzhou unveiled its new property market policy on the protection of leasing rights on the property market.

 

 

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