Rental prices mount in China's urban areas

Home rental prices in many cities across China have been rising steadily since the end of last year, and are becoming a burden for low income earners.

Experts are encouraging the government to increase supplies of public rental houses in order to meet the housing needs.

According to statistics from a real estate industry research institute in Wuhan,

the average rent for a one-bedroom apartment in the city was 878 yuan (139U.S. dollars) per month in April, up 37 percent compared to March. Rents for two-bedroom and three-bedroom apartments also went up 18 percent and 27 percent respectively month-on-month in April.

A surge in demand is behind the recent rental price hike, experts said.

Beijing remained a landlord's market in the first quarter, with demand remaining active. The rent growth, however, had slowed down compared with last year, real estate consultancy firm Cushman & Wakefield China said in its latest report.

April's moderation in the consumer price index rose by 3.4 percent, down from 3.6 percent in March, as aided by an easing in costs for food and housing.

Property sales in China's 11 major cities (not including Beijing) in the last two days of April increased 46 percent from the same period last year, according to Citigroup Global Markets.

A survey provided different findings from those in 2011 when Citigroup found that for the same 11 cities there was a year-on-year fall of 25 to 30 percent in housing sales.

Falling prices, together with stricter lending standards, have spurred a shift by would-be home buyers to the rental market, causing recent declines in the sales of both new and existing homes.

Public rental apartments are a type of affordable housing, which refers to units with set standards, prices and rentals provided by the governments for urban families with low and middle incomes. The various types of affordable housing include public rental apartment, low-rent houses, economically affordable houses and fixed-price commercial apartments.

Chen Jie, professor with the center of housing policy studies at Fudan University in Shanghai, called for different types of public rental apartments to be built and expanded, for example, in combination with dormitories to meet the needs of residents with different income levels.

Some experts suggested apartments be planned together with public transport and service facilities.

Some local governments have begun to lower the stringent requirements for applications for public rental apartment. The Housing Administration Department of Hongshan District in Wuhan recently decided to lift restrictions on per capita income by raising the monthly per capita income standard from below 2,500 yuan to below 3,500 yuan.

But wages and rental prices are rising in the longer term, noted ANZ bank in a commentary.

"We remain cautious on China's inflation outlook," it said, adding that "for the foreseeable future we expect to see significant increases in utility prices such as water, electricity, and fuel."