Home rental prices show no signs of abat­ing

China Daily (Canada) - - SHANGHAI - By WANG YING in Shang­hai

wang_y­ing@chi­nadaily.com.cn

Rental prices of Shang­hai’s apart­ments have risen for 16 con­sec­u­tive months since Septem­ber 2014, with the av­er­age rate per square me­ter soar­ing nearly 20 per­cent last year, ac­cord­ing to a re­port from prop­erty con­sul­tancy Cen­taline Prop­erty of Shang­hai.

The re­port also re­vealed that the av­er­age rental rates across the city surged 19.5 per­cent in 2015 from a year ago, and in the dis­tricts of Yangpu, Pu­tuo, Zhabei, Jiad­ing and Pudong New Area, prices rose more than 20 per­cent.

Lu Wenxi, a se­nior re­search man­ager from Cen­taline Shang­hai, said that the heated de­mand for homes would con­tinue to sup­port the leas­ing mar­ket in the first half of 2016, but rents are ex­pected to sta­bi­lize in the se­cond half of the year.

In down­town Shang­hai, the av­er­age rate per square me­ter ex­ceeded 110 yuan ($16.7) by the end of 2015. Specif­i­cally, rental prices in Jing’an district rose to 128.71 yuan per sq m, fol­lowed by Huangpu district (121.22 yuan), Changn­ing district (121.06 yuan) and Xuhui district (113.56 yuan).

Tra­di­tion­ally, the

leas­ing rental prices in the se­cond half of 2015, and real es­tate bro­ker­age com­pany Lian­jia fore­cast an­other wave of rent in­creases af­ter the Chi­nese New Year.

Cai Hong­sheng, a chain store man­ager with Lian­jia Shang­hai, said that many peo­ple have sought to se­cure home leases ahead of the Chi­nese New Year as they an­tic­i­pate a swell in de­mand for homes and an in­fla­tion of rental prices fol­low­ing the fes­tive pe­riod.

The ris­ing cost of rent­ing a home has as a re­sult in­creased pres­sure on low- and medi­u­min­come peo­ple in the city who are forced to move to sub­ur­ban and emerg­ing ar­eas for cheaper op­tions.

“We have no­ticed that the quick in­flux of peo­ple in the city has sat­u­rated af­ford­able liv­ing spa­ces and only a small group of peo­ple are qual­i­fied to ap­ply for govern­ment sub­si­dized houses,” said Sun Li, a se­nior re­searcher from Cen­taline Shang­hai.

Chen Jie, a pro­fes­sor from Shang­hai Univer­sity of Fi­nance and Eco­nom­ics who spe­cial­izes in prop­erty stud­ies, said that the lo­cal govern­ment has an ur­gent task of solv­ing the short­age of liv­ing space, es­pe­cially since the city is try­ing to be­come an at­trac­tive desti­na­tion for for­eign­ers to live and work.

“It is also worth not­ing that the city’s leas­ing mar­ket is strongly backed by the grow­ing pop­u­la­tion that was driven by the de­vel­op­ment of its free trade zone de­vel­op­ment as well as it goals of be­com­ing a tech­no­log­i­cal in­no­va­tive cen­ter by 2020,” said Chen.

Com­pared to the home trad­ing mar­ket, Chen said that Shang­hai’s leas­ing mar­ket has re­mained at a rea­son­able level. Ac­cord­ing to Chen’s re­search, the av­er­age an­nual rental price of an apart­ment only ac­counted for about 2 per­cent of its sell­ing price, com­pared to the global av­er­age, which usu­ally hov­ers be­tween 5 and 6 per­cent.

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