China to cap annual urban rent increases at 5 per cent to rein in runaway prices and make homes affordable to job seekers
- Rental charges in urban areas will not be allowed to rise by more than 5 per cent a year, the Ministry of Housing and Urban-Rural Development said
- Vice-premier Han Zheng has pledged to avoid using property as a tool to boost the economy
China’s government plans to put a lid on rental charges in the nation’s cities to rein in runaway housing costs, after years of draconian crackdowns have failed to make urban housing more affordable for the millions of people who enter the job market.
“New immigrants to our cities and many young people cannot afford to buy houses or rent homes in good locations,” which is disheartening for school leavers and new entrants in the labour market, said Vice-Minister Ni Hong, adding that 70 per cent or urban immigrants and low-income youth are renters. “Only when the young people have hope does the country have a future. The [government] places a great deal of [priority] in solving the housing difficulties faced by new immigrants in big cities.”
China’s government has spent many years trying to ease growing concerns about runaway property prices and to deflate any signs of property bubbles. Housing affordability, for both buyers and renters, has been a constant irritant in the government’s list of policy priorities, as it struggles to douse speculation in the US$2.7 trillion housing market.