China instructs six cities including Beijing, Shanghai and Shenzhen to build more public rental flats for low-income groups, young people

China has instructed the governments of six cities to build more public housing to be rented by low-income groups and young people who have found it difficult to own a home in one of the world’s largest housing markets.

Ni Hong, the country’s deputy housing minister, told officials in Beijing, Shanghai, Guangzhou, Shenzhen, Fuzhou and Nanning that the development of affordable rental housing was a major policy decision of the central government and the State Council.

“Cities with large population inflows and soaring home prices have to strictly implement the policy of developing public rental housing, and adhere to supply targets. Housing for young people and new migrants is a top priority,” he said in a regular working meeting.

The order comes as prices of new homes in 70 major Chinese cities registered their steepest growth in February since October last year. Cooling measures introduced by the central government in this period were largely offset by strong demand for property in some major cities.

Moreover, younger homebuyers will continue to be an important market segment. About 27 per cent of potential homebuyers in China will be under the age of 30 in 30 major cities this year, according to a survey by Beike Research Institute in December 2020. The number has risen slightly from the 26.3 per cent reported in 2020, it said.

The development of such projects is being encouraged as part of China’s 14th Five-Year Plan. Ni said local governments would provide the land and financing for the construction of the flats. They should also maximise the use of idle lands with enterprises and industrial estates for the development of these flats, he added.