The latest property measures implemented by the central government are providing extra momentum for rent increases in many Chinese cities, according to a survey conducted by the China Youth Daily.
The survey showed that 81.6 percent of the 4,060 respondents mostly from cities like Shanghai and Beijing, said that they are “suffering from the increase in rents", while 34.8 percent said their quality of life has been affected by the series of increases.
Not surprisingly, those renting houses in cities like Beijing and Shanghai were the most affected.
Shanghai implemented its first ever property tax on second-time buyers on 28 January. The property tax was the latest in a series of measures implemented by the central government to rein in soaring property prices.
Li Yongzhe, a property agent at Gucheng Agency in Shanghai, said that “house rent has increased by 20 percent since mid-2010 and has climbed to a historic high level.”
“The government’s tightening policy has scared away many potential buyers,” he said. “Instead of rushing to buy homes, many have chosen to rent.”
That trend has driven up the demand for rental properties in Shanghai.
In recent years, landlords have charged rents too low to cover the cost of investing in rental properties, said Xue Jianxiong, an analyst with the China Real Estate Information Corporation.
However, he said that landlords are now trying to cover those losses and ensure that their income is in line with the rising cost of living.
“In the past several years, property prices have not been the only thing that has jumped; commodity prices have undergone a huge increase as well,” he said.
“Besides, the introduction of the property tax is also adding to the cost of property investment and landlords are very likely to transfer all of the new costs to tenants.”