In the first half of this year, many cities issued regulatory policies for the property market. Now the second half has seen some cities produce new policies. One of them, aiming to develop the residential leasing market, grants tenants the same rights attached to housing as owner-occupiers.
A well-developed residential leasing market will help to resolve the housing problem. Compared with purchasing an apartment, renting one costs much less. Besides, for cities with a large mobile population, it's absolutely necessary to develop the residential leasing market.
However, while the commercial housing market is developing at full speed, other markets have been left far behind. There are several reasons for the lagging leasing market. Most people tend to feel insecure if they don't have an apartment of their own in the city where they live. China's residential leasing market tends to put tenants in a disadvantageous position. Rent hikes are only too common, but on the other hand, landlords worry about their homes being damaged by tenants.
Besides, the irrational price-to-rent ratio lures people to buy apartments and sell them when the price rockets, as has happened in the past decade. Some owners kept their apartments empty instead of renting them out to those in need of housing. As a result, more and more people have been opting to buy an apartment, even though it means huge financial pressure.
Given these factors, the residential leasing market can make little headway for the time being. This policy may be feasible in small cities, but seemingly impossible in big cities like Beijing and Shanghai.
China is trying to reform its housing supply system so that middle-income families can buy or rent apartments in the commercial housing market, and middle- and low-income families can buy or rent price-subsidized public apartments so that families at different income levels can all have access to housing.
(This is an edited excerpt of an article published in China Newsweek on August 21)