People will pay a premium for access to schools
Rental prices are likely to rise as officials call for giving tenants the same rights as home buyers.
Recently, several cities, including Guangzhou in South China's Guangdong Province, Wuxi in East China's Jiangsu Province and Zhengzhou in Central China's Henan Province, have announced measures stating that registered tenants are eligible for household registration (hukou), and can enroll their children in local schools and enjoy other public services under certain conditions. In most places, these benefits are currently reserved for home owners.
The Ministry of Housing and Urban-Rural Development (MOHURD), together with eight other government departments, released an announcement to boost the development of the housing rental market in medium and large cities on July 18.
According to the announcement, 12 cities have been chosen to carry out pilot programs, including Guangzhou, Nanjing in Jiangsu Province and Chengdu in Southwest China's Sichuan Province.
However, the move gave rise to concern that rents may surge due to limited housing resources, and because tenants will be given additional rights such as enrolling their children in good schools.
The MOHURD did not comment immediately when contacted by the Global Times on Monday. But the ministry said last Wednesday that the regulator will make rules to clarify the rights and duties of home owners and tenants and develop rules to stabilize rental periods and prices.
At present it is hard to predict whether the average rent across the nation will rise, but rents of houses in good school areas will go up, said Sun Kefang, former deputy chief engineer of the Urban Housing Industrialization Promotion Center under the MOHURD.
Even through the government may roll out policies to control rental prices, prices are still likely to rise because rents are a result of market-oriented resource allocation, Sun told the Global Times on Monday.
A Beijing-based real estate agent told the Global Times Monday on condition of anonymity that whether rent will rise also depends on subsequent house supply. "If the government supplies enough public rental houses and low-rent houses with relatively sound ancillary facilities, rents of private houses will likely decrease."
However, if housing rental services gain high market recognition in the future, the amount of rental houses may not be able to meet consumers' needs, resulting in a consumer rush and a rise in rental prices, said Yan Yuejin, a research director at the Shanghai-based E-house China R&D Institute. He said that setting rent ceilings or adjusting rental prices will benefit the healthy development of the housing rental market.
