Page 316 - 2018 White Paper on the Business Environment in China
P. 316
8 White Paper on the Business Environment in China
rental demand from urban newcomers. Measures will homes requires developers to have strong liquidity
be taken in cities with net population inflows, including management capacity and rich expertise in property
increasing rental housing supplies and setting up a management,” said Francis Yeung, General Manager of
government-backed home rental service platform, Sales and Marketing at real estate developer K. Wah
according to a notice issued by the Ministry of Housing China. SOEs with expertise and experience in the real
and Urban-Rural Development and other government estate sector are also encouraged to operate in the
departments. With a migrant population of 245 million, residential leasing market by developing and managing
and some 7 million college graduates starting work large-scale leasing projects. Individual homeowners
each year, newcomers to Chinese cities often find it rather than institutional operators currently dominate
hard to find a lease due to insufficient supply, market China’s residential leasing market. About 2 percent of
irregularities and lack of government support. To solve properties in the residential leasing market are operated
the issue, the Ministry is asking local governments to by institutional operators, according to a report
increase land supply for rental housing and enhance released on the Ministry of Housing and Urban-Rural
financial support for home-rental companies to build Development’s official website. The circular said cities
houses and apartments especially for rent. Some with net population inflows are required to establish
state-owned enterprises could turn into home-rental government-run trading platforms for the residential
companies to lead the development of the sector. The property leasing market to facilitate effective, fair and
government also encourages real estate developers, transparent transactions, with a particular emphasis
housing brokers and property service providers to set on protecting the rights of tenants. Sheng Yue, an
up subsidiaries on housing rental business (Xinhua, official with the Ministry’s Leasing Market Supervision
China Moves). Division, said that the trading platform would also help
to supervise and monitor the residential leasing market
The Ministry of Housing and Urban-Rural (China Daily).
Development along with eight departments have
issued a circular on speeding up the development of the Since March 2017 about 60 major cities have
rental market in growing cities, CCTV news reported. At reportedly unveiled 170 measures that set stricter
present, a growing number of new citizens live in large mortgage restrictions and higher down payment
and medium-sized cities, with strong demand for rental requirements to root out market speculation. Such
housing, the circular said. Meanwhile, problems such measures to curb soaring house prices have been called
as insufficient supply of rental housing sources, poorly the toughest in China’s history, and the latest official
regulated market order and incomplete policy support data seem to prove that such tightening measures have
systems have spread in some cities with net inflow of had some effect in cooling the once red-hot market. Of
population. These big cities should support relevant the 70 major cities surveyed, 30 recorded a lower price
state-owned enterprises (SOEs) in becoming home increase year-on-year in April 2017, up from 24 in March
rental enterprises, the circular said, in order to better 2017, according to the NBS. Yet the fact that investment
leverage the leading role of SOEs in stabilizing rent and in property development remained robust in April 2017
increasing the effective supply of rental housing (Song, despite the intensified government controls shows
Chinese Cities). there is no room for complacency. Based on the property
price-to-wage ratio compiled by the International
The circular highlights land policy that enables Monetary Fund, housing prices in China’s largest cities
newly built commercial housing projects to allocate are already the highest in the world. And given that
some of the apartments to be leased instead of being nearly 45 percent of new bank loans flowed into the
sold. Metropolises and large cities can pilot programs housing market in 2016, according to China’s central
to use land for collective rental housing projects. In bank, housing market bubbles, fueled by speculative
terms of financing, the Ministry’s circular said the investments, are thought to pose not only one of the
authorities encourage banks and other financial biggest risks to China’s economic growth but also its
institutions to strengthen financial support for rental financial security, which President Xi Jinping recently
housing projects, which take a longer time to break identified as a key element of national security (Rental).
even than other types of housing development.
“Selling homes, particularly those of good quality in Thus it is no coincidence that the Ministry of Housing
prestigious locations may realize a quick return. Leasing and Urban-Rural Development issued a draft regulation
316
rental demand from urban newcomers. Measures will homes requires developers to have strong liquidity
be taken in cities with net population inflows, including management capacity and rich expertise in property
increasing rental housing supplies and setting up a management,” said Francis Yeung, General Manager of
government-backed home rental service platform, Sales and Marketing at real estate developer K. Wah
according to a notice issued by the Ministry of Housing China. SOEs with expertise and experience in the real
and Urban-Rural Development and other government estate sector are also encouraged to operate in the
departments. With a migrant population of 245 million, residential leasing market by developing and managing
and some 7 million college graduates starting work large-scale leasing projects. Individual homeowners
each year, newcomers to Chinese cities often find it rather than institutional operators currently dominate
hard to find a lease due to insufficient supply, market China’s residential leasing market. About 2 percent of
irregularities and lack of government support. To solve properties in the residential leasing market are operated
the issue, the Ministry is asking local governments to by institutional operators, according to a report
increase land supply for rental housing and enhance released on the Ministry of Housing and Urban-Rural
financial support for home-rental companies to build Development’s official website. The circular said cities
houses and apartments especially for rent. Some with net population inflows are required to establish
state-owned enterprises could turn into home-rental government-run trading platforms for the residential
companies to lead the development of the sector. The property leasing market to facilitate effective, fair and
government also encourages real estate developers, transparent transactions, with a particular emphasis
housing brokers and property service providers to set on protecting the rights of tenants. Sheng Yue, an
up subsidiaries on housing rental business (Xinhua, official with the Ministry’s Leasing Market Supervision
China Moves). Division, said that the trading platform would also help
to supervise and monitor the residential leasing market
The Ministry of Housing and Urban-Rural (China Daily).
Development along with eight departments have
issued a circular on speeding up the development of the Since March 2017 about 60 major cities have
rental market in growing cities, CCTV news reported. At reportedly unveiled 170 measures that set stricter
present, a growing number of new citizens live in large mortgage restrictions and higher down payment
and medium-sized cities, with strong demand for rental requirements to root out market speculation. Such
housing, the circular said. Meanwhile, problems such measures to curb soaring house prices have been called
as insufficient supply of rental housing sources, poorly the toughest in China’s history, and the latest official
regulated market order and incomplete policy support data seem to prove that such tightening measures have
systems have spread in some cities with net inflow of had some effect in cooling the once red-hot market. Of
population. These big cities should support relevant the 70 major cities surveyed, 30 recorded a lower price
state-owned enterprises (SOEs) in becoming home increase year-on-year in April 2017, up from 24 in March
rental enterprises, the circular said, in order to better 2017, according to the NBS. Yet the fact that investment
leverage the leading role of SOEs in stabilizing rent and in property development remained robust in April 2017
increasing the effective supply of rental housing (Song, despite the intensified government controls shows
Chinese Cities). there is no room for complacency. Based on the property
price-to-wage ratio compiled by the International
The circular highlights land policy that enables Monetary Fund, housing prices in China’s largest cities
newly built commercial housing projects to allocate are already the highest in the world. And given that
some of the apartments to be leased instead of being nearly 45 percent of new bank loans flowed into the
sold. Metropolises and large cities can pilot programs housing market in 2016, according to China’s central
to use land for collective rental housing projects. In bank, housing market bubbles, fueled by speculative
terms of financing, the Ministry’s circular said the investments, are thought to pose not only one of the
authorities encourage banks and other financial biggest risks to China’s economic growth but also its
institutions to strengthen financial support for rental financial security, which President Xi Jinping recently
housing projects, which take a longer time to break identified as a key element of national security (Rental).
even than other types of housing development.
“Selling homes, particularly those of good quality in Thus it is no coincidence that the Ministry of Housing
prestigious locations may realize a quick return. Leasing and Urban-Rural Development issued a draft regulation
316
