Signs of stability for overall housing market: experts
Apartment rents in first-tier cities have been falling as supplies increase and demand shrinks amid slowing transactions for homes, indicating a steadier property market overall, according to experts.
Rents for Shanghai apartments ended a 90-month string of rises in January, data from the Shanghai housing rental index office showed, according to a report by domestic newspaper International Financial News on Tuesday.
In April, Centaline's home rental index, which tracks 295 residential projects in all segments in 78 areas across Shanghai, fell 1.09 percent month-on-month and 4.38 percent year-on-year, with an average monthly rent of 77.7 yuan ($11.34) per square meter, according to media reports.
"Demand is going down in Shanghai's rental market due to the tightening policy on newcomers to the city and high home prices," Hui Jianqiang, research director with real estate information provider Beijing Zhongfangyanxie Technology Service, told the Global Times on Tuesday.
In recent years, fewer people have moved into Shanghai and the number of permanent residents (those with hukou) has deceased in the past two years, Hui said.
Also, Hui noted, supplies have been improving relative to demand. "In Shanghai, the number of apartments for rent has been rising and some real estate developers have been given approval to build and sell apartments only for rent."
Lower rents will help steady the market overall, because people won't be in a panic to buy, according to Hui.
"With transactions of homes cooling in first-tier cities, some owners won't sell their properties but will instead offer them for rent, releasing more supply and driving down rents," Yan Yuejin, research director at Shanghai-based E-house China R&D Institute, told Global Times.
More than 150 property regulations have been rolled out in nearly 60 cities since March, according to International Financial News. As a result, cities with hot markets have seen price stabilization and a plunge in transactions.
The report said that besides Shanghai, rents in the nation's other three first-tier cities (Beijing, Shenzhen and Guangzhou, capital of South China's Guangdong Province) have also weakened.
An agent for large real estate agency Lianjia surnamed Zhao told the Global Times that the rent on a two-bedroom apartment in a quality residential building near the East Fourth Ring Road in Beijing is now 200 yuan to 300 yuan less than the same month last year.
The apartment rental market in China is "abnormal" in terms of the proportion of units for rent taking up less than 10 percent while the rest are for sale, compared with an even split in developed countries, said Huang Qifan, vice chairman of the National People's Congress' Financial and Economic Affairs Committee, during a speech at Fudan University on Friday.