Long Term Leasing Emerges as Central Plank of Housing Market Reforms

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China’s latest Central Economic Work Conference has highlighted long-term home leasing as one of the key measures for reform of the country’s overheating urban real estate markets.

One of the eight key work points outlined by the conference held on 18 – 20 December was the “acceleration of the creation of a residential housing system with multi-party supply, multiple guarantee channels, which gives equal play to leasing and purchasing.”

The Conference also marks the first time that China’s central government has mooted the concept of “long-term leasing,” after sending repeated signals since the start of the second half of that it would endeavour to expand the home rental market to deal with the over-heating property sector.

According to the Conference, China needs to “develop the residential home leasing market, and in particular the long-term leasing market; protect the lawful rights of those parties with interests in relation to leasing, and support the development of specialised, institutional home leasing companies.”

Yan Yuejin (严跃进), researcher from the Shanghai E-House Real Estate Research Institute, said to Shanghai Securities News that “the conference’s focus on the leasing market indicates the high priority given at a policy level.

“The development of the leasing market will become the core of next year’s reforms of residential housing system.”

According to Yan this inaugural reference to “long-term leasing” portends the release of a slew of complementary support policies in future.

Liu Weimin (刘卫民), vice-chair of the real-estate research office of the Development Research Centre of the State Council, said that “giving equal play to leasing and purchasing” was the “biggest bright spot” when it came to reform and improvement of the current real estate supply system.

“At present the market has already reformed a considerable inventory of residential homes, providing excellent material conditions for the leasing market.”

 

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