China Economic Review: Accelerate the establishment of a housing system that combines renting and purchasing
2024-08-14
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Every summer graduation season, there will be a peak in the number of university graduates renting houses. Many parents of primary and secondary school students will also prepare to rent houses for the new semester. Therefore, the three months of June, July and August every year are the most active stages of the housing rental market. In recent years, housing rental has played an increasingly important role in solving the housing problems of urban residents. The "Decision of the Central Committee of the Communist Party of China on Further Deepening Reforms and Promoting Chinese-style Modernization" proposed to accelerate the establishment of a housing system that combines renting and purchasing. The Third Plenary Session of the 20th CPC Central Committee once again emphasized the combination of renting and purchasing, indicating that housing rental will be an important direction for the development of my country's housing sector.
For a long time, my country's real estate market has been "long on sales and short on leasing". Due to the lack of standardized management, the housing rental market has developed relatively slowly. Accelerating the filling of the gap in housing rental has always been a policy that needs to be repeatedly emphasized.
In fact, my country's housing rental market has broad prospects and should become an important way to solve housing problems. The development of housing rental is an important part of building a new model for real estate development. Looking overseas, the reason why the housing rental market in countries such as Germany is very developed is first of all their consumption concept. They believe that buying a house will take up a lot of money and will reduce the standard of living, and renting a house is more cost-effective. Secondly, it is because the rent is relatively moderate. More importantly, the country's laws and regulations on housing rental are very complete and focus on protecting the rights and interests of tenants. In the past, many people were reluctant to rent a house because of the rapid growth of housing prices and panic buying. With major changes in the supply and demand relationship in the real estate market, housing prices have entered a relatively stable cycle, panic buying has decreased, and more people will be willing to stay in the housing rental market for a longer time. With the improvement of my country's housing rental legislation and the strengthening of management, the protection of the rights and interests of tenants will be more complete, which will further expand the development space of the housing rental market.
In recent years, my country's housing rental market has made great progress. Various places are building and raising "good houses" to meet diversified rental needs such as "a bed, a room, and a suite". At the same time, efforts are also being made to provide good services for rental housing, adhere to the people-oriented principle, adhere to the "green, smart, comfortable, and pleasant" standards, and create small-space, fully functional, livable products that meet the characteristics of young people, so that more young people can stay, live in peace, and start a business. The housing provident fund has increased its support for rental withdrawals, and encouraged large cities to support new citizens and young people to fully withdraw the monthly housing provident fund deposits to pay rent. In 2023, a total of 18.4609 million people withdrew 203.128 billion yuan for rental housing, an increase of 20.04% and 33.52% respectively over the previous year. Housing rental companies are developing rapidly. According to data from China Index Academy, in July 2024, Vanke Parkview, Longfor Crownview, and Magic Cube Life Service Group ranked the top three in the list of the scale of opening of my country's housing rental companies, with 185,000, 123,000, and 82,000 rooms respectively. The cumulative number of opening houses of the top 30 centralized long-term rental apartment companies has increased to 1.174 million. At present, some cities continue to make efforts in housing rental legislation and cultivating professional, large-scale, and branded housing rental companies, and the activity of the housing rental market continues to increase.
The allocated affordable housing will better solve the housing problems of the housing-insecure groups. Planning and building affordable housing is one of the "three major projects" currently being promoted. my country divides affordable housing into two types: allocated and sold. The allocated type includes public rental housing and affordable rental housing. Public rental housing is mainly for urban housing and families with income difficulties, solving the housing problems of low-income groups. Affordable rental housing is mainly for new citizens and young people, who usually have housing needs, but have limited ability to buy houses and do not meet the income requirements for applying for public rental housing.
Financial support will provide essential support for the development of housing rental. In January 2024, the People's Bank of China and the State Financial Supervision and Administration Bureau issued the "Opinions on Financial Support for the Development of the Housing Rental Market", encouraging commercial banks to actively explore financial service models and financial products suitable for the needs of housing rental-related enterprises, and guiding various types of social funds to invest in the housing rental field in an orderly manner, which will play an important role in promoting the development of the housing rental market. The state will further increase its support for allocated affordable housing. The People's Bank of China will set up 300 billion yuan of affordable housing re-loans, encourage and guide financial institutions to support local state-owned enterprises in purchasing completed and unsold commercial housing at reasonable prices for use as affordable housing in accordance with market-oriented and rule-of-law principles.
It can be foreseen that housing rental will play a more important role in solving housing problems. With the advancement of equal rights for renting and purchasing, the optimization of the rental market environment, and the development of allocated affordable housing, the concept of "buying more and renting less" will gradually change. For related companies, the rental market will be an important track, and the development opportunities of housing rental business should not be missed. However, it should also be recognized that the development of housing rental is a small and sustainable process. Housing rental companies should firmly believe in sustainable development, see the general trend, and follow the trend. In the future, the development of housing rental still requires the joint efforts of the government, industry organizations, enterprises, etc., and it is imperative to accelerate the establishment of a housing system that combines renting and purchasing. (Source: Economic Daily Author: Kang Shu)
Source: Economic Daily
