Page 318 - 2018 White Paper on the Business Environment in China
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8 White Paper on the Business Environment in China
to standardize the residential rental market and make has been allocated for real estate development on the
it an attractive alternative to buying houses, since the condition that apartment will be for rent, not for sale.
lack of a mature rental property market has been one “Nationwide, the basic mechanism is being formed. I
of the reasons why the repeatedly introduced measures believe other top-tier cities like Shenzhen, Shanghai
to curb speculation have only achieved short-term and Beijing will also move forward in this regard,”
success. The measures contained in the draft regulation, Song said. China’s property market has shown signs of
such as forbidding landlords from arbitrarily evicting cooling as prices faltered or posted slower growth in
tenants or raising the rent without notifying tenants major cities amid tough government curbs, according
three months in advance, all offer better protection of to data from the NBS. However, new home prices in
tenants’ rights in a bid to encourage more people to rent some small cities have registered fast growth. However,
a house instead of buying one (Rental). the fact that education resources are lacking remains
unchanged, and it is not possible to guarantee complete
Guangzhou will give tenants and homeowners equal equal rights for everyone, Sun said. There may also be
rights to education resources, quashing a former rule. risks that rents around very good schools will soar, he
The regulation is part of a larger plan to increase the said. In the work plan, Guangzhou has also promised
number of renters and curb property prices. The city to assign more houses for rent and allow estate agents
is the first top-tier Chinese city to grant equal rights to renovate old apartments and dilapidated buildings
to renters and homeowners. In many cities across the (Xinhua, Guangzhou).
country, property is more expensive in areas around
good schools. The right to attend these schools, however, Shanghai’s land and planning authorities said in
is limited to the offspring of homeowners, rather than 2017 that two parcels, 65,000 square meters in Pudong
tenants. “Improving the rental market is an important District’s Zhangjiang Science Park area and 28,500
part of housing reform and improving people’s lives. It is square meters in Jiading District, would be leased for 70
part of Guangzhou’s long-term residential plan,” said an years, and those who acquire the land parcels at later
official with the Guangzhou Housing and Urban-Rural auctions must ensure that the projects developed must
Construction Committee. Under the new regulation, be rented residential properties. Lu Wenxi, a Shanghai-
tenants who hold a Guangzhou “hukou” (household based Centaline Property analyst, said that “rental
registration) or a skilled worker certificate will be able to residential property” is a brand-new purpose for land
enroll their children in elementary and middle schools. use emerging amid a fast changing residential property
Sun Bushu, Deputy Director of South China City Research market. “Since the beginning of 2017, Shanghai has
Association, called the regulation “commendable” as it been making a series of moves to encourage the
addresses issues in the property market and will help development of the rental market to improve efficient
attract more people with skills to the city. However, and reasonable use of land. Leasing land parcels for
the fact that the lack of education resources remains rental purposes only is a direct move to support rental
unchanged, and it is not possible to guarantee complete market growth and a gesture to guide the market to
equal rights for everyone, Sun said. “The main group consider other options of residential development,” said
of people who will benefit from the policy are skilled Lu. According to Shanghai’s land planning authorities,
workers or people whom the city wants to attract, not priority is given to bidders aiming to develop projects
migrant workers,” said Sun. “Desirable property, such as for rental projects for highly skilled staff moving from
homes near good schools, are already priced accordingly. other locations to Shanghai, such as leading scientists
When the regulation goes into action, there is a risk that and experts. Rental costs shall not be higher than the
rents will soar,” he said. average level of similar properties, and can be adjusted
in accordance with market price fluctuations. So far,
Song Ding, a real estate market researcher with China 10 of the top 30 developers in China have tapped
Development Institute, said Guangzhou’s new policy is a into the rental market across China, according to data
strong signal that policy is moving toward being in favor from Shanghai-based China Real Estate Information
of the rental market. Guangzhou has also promised to Corporation (CRIC), a real estate information services
assign more houses for rent and allow estate agents provider. “Entering the rental market requires strong
to renovate old apartments and dilapidated buildings. cash flow management capacities as projects work on
In 2016, the State Council ordered local governments long-term stable and steady income, and big players are
to develop the rental market. In Shanghai, new land already allocating more resources in this niche market.
318
to standardize the residential rental market and make has been allocated for real estate development on the
it an attractive alternative to buying houses, since the condition that apartment will be for rent, not for sale.
lack of a mature rental property market has been one “Nationwide, the basic mechanism is being formed. I
of the reasons why the repeatedly introduced measures believe other top-tier cities like Shenzhen, Shanghai
to curb speculation have only achieved short-term and Beijing will also move forward in this regard,”
success. The measures contained in the draft regulation, Song said. China’s property market has shown signs of
such as forbidding landlords from arbitrarily evicting cooling as prices faltered or posted slower growth in
tenants or raising the rent without notifying tenants major cities amid tough government curbs, according
three months in advance, all offer better protection of to data from the NBS. However, new home prices in
tenants’ rights in a bid to encourage more people to rent some small cities have registered fast growth. However,
a house instead of buying one (Rental). the fact that education resources are lacking remains
unchanged, and it is not possible to guarantee complete
Guangzhou will give tenants and homeowners equal equal rights for everyone, Sun said. There may also be
rights to education resources, quashing a former rule. risks that rents around very good schools will soar, he
The regulation is part of a larger plan to increase the said. In the work plan, Guangzhou has also promised
number of renters and curb property prices. The city to assign more houses for rent and allow estate agents
is the first top-tier Chinese city to grant equal rights to renovate old apartments and dilapidated buildings
to renters and homeowners. In many cities across the (Xinhua, Guangzhou).
country, property is more expensive in areas around
good schools. The right to attend these schools, however, Shanghai’s land and planning authorities said in
is limited to the offspring of homeowners, rather than 2017 that two parcels, 65,000 square meters in Pudong
tenants. “Improving the rental market is an important District’s Zhangjiang Science Park area and 28,500
part of housing reform and improving people’s lives. It is square meters in Jiading District, would be leased for 70
part of Guangzhou’s long-term residential plan,” said an years, and those who acquire the land parcels at later
official with the Guangzhou Housing and Urban-Rural auctions must ensure that the projects developed must
Construction Committee. Under the new regulation, be rented residential properties. Lu Wenxi, a Shanghai-
tenants who hold a Guangzhou “hukou” (household based Centaline Property analyst, said that “rental
registration) or a skilled worker certificate will be able to residential property” is a brand-new purpose for land
enroll their children in elementary and middle schools. use emerging amid a fast changing residential property
Sun Bushu, Deputy Director of South China City Research market. “Since the beginning of 2017, Shanghai has
Association, called the regulation “commendable” as it been making a series of moves to encourage the
addresses issues in the property market and will help development of the rental market to improve efficient
attract more people with skills to the city. However, and reasonable use of land. Leasing land parcels for
the fact that the lack of education resources remains rental purposes only is a direct move to support rental
unchanged, and it is not possible to guarantee complete market growth and a gesture to guide the market to
equal rights for everyone, Sun said. “The main group consider other options of residential development,” said
of people who will benefit from the policy are skilled Lu. According to Shanghai’s land planning authorities,
workers or people whom the city wants to attract, not priority is given to bidders aiming to develop projects
migrant workers,” said Sun. “Desirable property, such as for rental projects for highly skilled staff moving from
homes near good schools, are already priced accordingly. other locations to Shanghai, such as leading scientists
When the regulation goes into action, there is a risk that and experts. Rental costs shall not be higher than the
rents will soar,” he said. average level of similar properties, and can be adjusted
in accordance with market price fluctuations. So far,
Song Ding, a real estate market researcher with China 10 of the top 30 developers in China have tapped
Development Institute, said Guangzhou’s new policy is a into the rental market across China, according to data
strong signal that policy is moving toward being in favor from Shanghai-based China Real Estate Information
of the rental market. Guangzhou has also promised to Corporation (CRIC), a real estate information services
assign more houses for rent and allow estate agents provider. “Entering the rental market requires strong
to renovate old apartments and dilapidated buildings. cash flow management capacities as projects work on
In 2016, the State Council ordered local governments long-term stable and steady income, and big players are
to develop the rental market. In Shanghai, new land already allocating more resources in this niche market.
318
