Summary of What’s Causing the Sharp Rise in China’s Rent?

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What’s Causing the Sharp Rise in China’s Rent? summary
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Wellestudio163 writer Zhang Fan investigates what forces made residential housing rental prices shoot up in Chinese cities between 2017 and 2018 and concludes that government policy rather than market forces are to blame. getAbstract recommends this article to anyone who follows real estate developments, people interested in social issues, and anyone trying to buy or rent in China.

About the Author

Zhang Fan is a reporter for NetEase’s Wechat wemedia account Wellestudio163, which focuses on social issues, current events and trends.

 

Summary

Between 2017 and 2018, residential housing rental prices in 17 Chinese cities jumped an average of 8%–15%. Population didn’t significantly grow during that period; in fact, Beijing’s and Shanghai’s populations have actually decreased slightly. Instead, skyrocketing prices are the result of the Chinese government’s housing and real estate policies.

Since roughly 2008, local governments have benefited from property taxes and selling land. The significance of real estate income differs by region, but local governments across the country profit from selling land to real estate developers. In the southwestern metropolis of Chongqing, profits from such sales make up more than 25% of overall government revenue.    

Given the unpredictability of China’s credit and stock markets, real estate has emerged as a safe and profitable area for wealth management and investments. The reliable returns...