(Yicai Global) Aug. 24 -- Local authorities in some of China's biggest cities are stepping up supervision of the home rental market as tenants across the nation fear rate hikes in metropolises could spread to smaller towns.
Beijing blazed the trail by demanding leasing agencies avoid malicious rent hikes and setting up a hotline for tenants with complaints about the intermediaries. Nanjing, Tianjin and other cities are now looking to follow suit, with tech hub Shenzhen proposing to cap rent prices and others holding conferences to discuss how best to tackle the situation.
Rents in Shenzhen rose more than 20 percent annually last month, a steep climb even for the summer graduation season, according to report by state broadcaster CCTV. The local rental market is worth more than CNY100 billion (USD14.8 billion), with 78 percent of young people, about a third of the population, leasing homes in the city.
To combat the problem, Shenzhen is exploring a rent limit on new build properties and other real estate developments, said Wang Feng, director of the Shenzhen Real Estate Research Center. In future, the restrictions will also determine the length of rental contracts, he added.
China needs to accelerate the formation of a common platform for housing resources and funds and set up a credit rating system, state-backed news site The Paper quoted Yan Yuejin, director of research at the E-House China Research Institute, as saying. He believes the government must act as a stabilizer for the rental market by leveraging public housing and other resources.
Legal disputes are going to become ever more complex with the introduction of internet finance to the housing sector, Yan added, saying that the market is about more than just contracts between landlords and tenants. There are financial risks to be guarded against, too, he said.
Editor: James Boynton