Beijing rents soar 82 percent in 5 years

By Zhang Yiwei Source:Global Times Published: 2013-4-23 0:48:02

The  average monthly rent of an apartment in Beijing has increased about 82 percent compared to prices five years ago, China Central Television (CCTV) reported recently, and experts say the key cause is the current serious imbalance between supply and demand in the housing market.

The average monthly rent of an apartment in Beijing was 3,660 yuan ($591) in the first quarter, while the rent was 2,010 yuan in 2008, a CCTV report said on Friday.

Hu Jinghui, vice-president of property brokerage 5i5j Real Estate, told the Securities Times that a lack of new properties entering the market, more people flowing into Beijing and the rising CPI  are the three major causes of skyrocketing rents.

According to the statistics from Centaline Property, the supply and demand ratio reached 1:7.6 in March.

Wu Dong, a white-collar worker who has lived in rented apartments in Beijing for two years, told the Global Times that she moved to Yanjiao town, Hebei Province, a suburb just east of Beijing, in June after her previous landlord raised her rent.

"The contract I signed with my landlord expired and he increased the rent from 3,300 yuan a month to 4,000 yuan a month," said Wu. "I declined and moved to my current place."

Hu said that there are many relocated households in Beijing that own many properties, and the rent is a major component of their income and rising prices of commodities mean they have to increase the rents they charge.

Jiang Jingxi, a Beijing resident who owns several rental properties, told the Global Times rising rents are a reflection of the market.

Jiang's 100-square-meter property in the central business district of Beijing earns him 7,000 yuan per month, and every year he raises the rent 1,000 yuan a month. He raised the rent on his suburban properties 10 percent a year, after a nearby subway line opened.

"I never consider selling my properties since cash is inferior to property in terms of appreciation," said Jiang.

The central government on March 30 implemented a 20-percent capital gains tax on most property sales. The regulation aims to curtail real estate speculators, but could also affect rents.

"The new regulation has reduced the supply of resale properties and to some extent is keeping people in the rental market," Li Jingguo, a property researcher with the Chinese Academy of Social Sciences, told the Global Times, adding that the impact on the rental market is not yet clear.

"Holding down rents is very difficult as demand exceeds supply," Li said.

Posted in: Society, Economy

blog comments powered by Disqus