The rise in rent in front-line cities has recently become a hot topic. On 29 august, shenzhen expanded after the new deal for the city of 7/31: it is proposed to introduce a certain amount of prices to control the release of rental housing to the market and stabilize the city-wide rent level。
At the shenzhen houses fair, it was revealed that shenzhen was exploring the establishment of a city-wide system of stable rental commodity housing projects, with rent controls, and that the price of one house could fluctuate by 5 per cent per year and be rented to eligible residents of the city in order of application。
This initiative has been evaluated differently in shenzhen. The specifics of how these “stable rental commodity houses” are expanded, how rents are reasonably priced and how they are distributed remain to be tested in the market。
If the pilot project is successful and more housing resources enter in the future, it is expected to have a profound impact on the housing rental market in shenzhen and even throughout the country。
Rental control experiment
As one of the country's most developed and active rental markets, shenzhen's residence is predominantly rent-based, with 34 per cent of the city-wide resident population having a home ownership rate, and about two thirds of the resident population having to deal with housing problems through market rentals, occupancy units and swing space。
According to the shenzhen survey team of the national statistics institute, the increase in the rental price index in shenzhen city has been on the rise for 11 months. In july 2018, the shenzhen lease price was 105. 0 per annum, slightly higher than the cpi index 102. 5 for the same period, and reached the reasonable inter-zonal ceiling for municipal monitoring of early warning systems。
In addition, according to the analysis of data from the shenzhen city commission on the market for the leasing of intermediaries and the rental of urban villages, in july 2018 the city-wide rental rate for commercial residential units was 82. 22 yuan/m2, an increase of 5. 17 per cent in the ring ratio, and the rental rate for urban residential units was 39. 16 yuan/m2, approximately half of the rent for commercial residential units。
Many people in shenzhen feel that the rent is rising significantly. In this context, shenzhen city proposes to pilot a rent control project. According to a presentation by fifi, the real estate department of shenzhen city of shenzhen, which pays for the rental of goods, refers to the construction and organization of housing enterprises, which are rented and not sold for a certain period of time, are subject to rent control or guidance from the competent government authorities and are intended for the rental of goods by unpurchased residents working throughout the city。
These source rents will be priced using a market assessment methodology to assess start-up rents and to achieve “one house at a price”, and rent positioning will not be higher than, and may be somewhat lower than, the price of rentals for the same quality commodity in the surrounding market。
Second, a rent adjustment is made at the end of each year, based on the principle that the annual rent growth rate does not exceed 5 per cent, positive or negative, in order to maintain market stability. The reference criteria for the increase were market developments during the year, including price assessments of the surrounding rents, the growth of the cpi, the growth of disposable income, the rate of return on banking property, etc。
This system is intended for residents who have paid social security contributions in shenzhen for one year and who do not have any form of own-home and policy housing in shenzhen, and who can only apply for a single room for the same period。
In order to maintain a long-term lease relationship, it avoids being sold on lease. The duration of the first lease is less than one year and more than three years, and the lease is renewed for a period not exceeding two years, after which the lease is withdrawn and the queue is re-listed。
According to the shenzhen municipal commission, the first pilot project is the quancing apartments in tong long city, which was developed in cooperation with shenzhen metro and deep industries group, and is used for the rental of 248 apartments, which are expected to be leased online in early 2019 and moved in in in september 2019。
In the view of song tin, director of the tourism and property research centre of the shenzhen institute for integrated development, this policy is of a rather experimental nature and has been proposed in response to the recent rent boom, and it is important to see how much it can do in practice, and whether it is reasonable to impose direct restrictions on rent prices and to assess them。
How to flatten the rent
At the heart of the system of stable rental commodity housing is the conversion of certain built and about-to-be-constructed commercial housing units held by enterprises and other organizations and units into affordable rental housing; through the pass-through effect of prices, it affects the rental prices of surrounding buildings, blocks, regions and even city-wide, thus leading to rational pricing of rents throughout the city。
According to the u. S. Attorney general, this does not mean an increase in rental housing, but a transformation of existing housing sources. This approach is certainly a prerequisite for future cooperation with non-state enterprises, starting with state enterprises, and needs to be based on reasonable rent prices, so the challenge of increasing the supply of housing is inevitable, and future expansion of the supply will not be easy。
In response to this problem, fifi revealed that after the piloting of rental controls for commercial housing had had some effect, consideration would be given to opening up other types of housing sources for rent control。
For example, since the development of the lease pilot project in 2017, shenzhen has granted four fully owned rental housing plots, five or six more plans this year and two more land announcements last week, which could be included in rent control。
Others, such as idle commercial upgrading, urban renewal and land preparation, self-construction of industrial parks and mobilization of social housing sources, may also be included in secure rental housing sources。
According to fifi, the effective supply of rented housing is above all stock-taking, with urban villages accounting for about 60 per cent of the total rental market as providers of rental market development, and official policies are being developed to further regulate the market。
In january of this year, many of the city-wide unified housing rental service platforms built by the housing authority became operational, with more than 140,000 housing units currently in stock。
Can the system be effective in terms of smooth prices in rental markets? Wang bing, director of the centre for real estate research in shenzhen city, stated that a completely new housing lease model would inevitably have radiation effects on the surrounding rent. Once the system has been fully rolled out, it will also serve as a model for the rest of shenzhen city and for the country as a whole。
The chief analyst of china's real estate, zhang daewei, also believes that such state or government-owned sources of housing at their own prices have a positive effect on the stability of the rental market. First, supply can be increased directly and demand and demand stress can be alleviated; second, prices can be stabilized and irrational price increases avoided。
There are also marketers who believe that this policy is unlikely to fully regulate rent prices throughout the city due to the highly marketable pricing mechanisms in the leasing market. Ho zhou indicated that such a system has primarily “the effects of radiation effects”。
In her view, having a beneficial impact on the rental market required two prerequisites. The first is to ensure sustained growth in the supply; the second is that the rent of such housing is subject to a time test as to whether it matches market prices, even lower than market prices。
