Rental platform Baletu sees opportunity as China’s young turn to shared accommodation
The platform links tenants and landlords directly, cutting out agents, and is targeting expansion as the government promotes renting amid overheated property prices
Surging house prices in China have rekindled interest in rental accommodation, particularly for the nation’s youth who are effectively priced out of the market in many cities, and that interest is turning into a new opportunity for Baletu, a four-year-old web platform that links tenants directly with landlords.
The platform has recently attracted rental listings from major Chinese property developers, including Longfor, Vanke and Country Garden, who have stepped into the rental market encouraged by the central government’s recent promotion of renting. The three have put more than 100,000 flats on Baletu.
The platform’s founder, Norman Lui Nam, a 47-year-old electrical engineering graduate who had set up the now Nasdaq-listed job hunting online platform 51job.com 20 years ago, said he aimed to shake up China’s rental market and bring affordable accommodation within the reach of young people.
“They cannot afford to buy a house or even to rent one all alone when they first come to cities like Beijing and Shanghai, but they still want a decent and comfortable place to live,” Lui said in a recent interview.
“We hope to put everything online through our system, from signing the contract to communication between tenants and landlords, from paying the monthly rent to making and receiving deposits as well as settling maintenance fees.”
Starting business in 2014, Baletu links tenants directly with landlords and does not charge tenants any fee. Traditional agents can usually charge up to 50 per cent of the monthly rent to the tenant and the same to the landlord. The platform is now operating in 14 cities, including Shanghai, Beijing, Shenzhen, Hangzhou and Guangzhou, and sees several tens of thousands of deals every month.
Lui’s new target is the increasing need for shared accommodation among young people settling in China’s big cities. For example, a flat an hour away from central Beijing would usually rent for 8,000 yuan to 10,000 yuan per month (US$1,250 to US$1,562), but with young workers only likely to have a budget of 2,500 yuan to 3,000 yuan, sharing is the only option.
This situation has given rise to the so-called middlemen landlords, who rent a property from an individual owner and then handle the search for multiple tenants, saving the owner the work and taking a cut from the rent.
“Some private middlemen might only hold dozens of houses while larger institutional ones, like long-term rental apartment operators, have more than 10,000 units in their portfolio. We have different service packages for different landlords,” said Lui.
He said that by using Baletu the average vacancy period can be reduced to less than a week, compared to about two weeks or more via traditional agents. In addition, the platform allows tenants to comment on landlords and give them ratings.
“With such a system, we hope to upgrade the rental market, which has a great potential to grow in the future,” said Lui.
He said the company plans to reach 80 per cent of middlemen landlords in first- and second-tier cities in China, and currently has around 10,000 using the platform.
Traditional agents said that they had not seen much impact from Baletu yet, but they were worried that online platforms could grab a bigger slice of the market later.
“Coming to find a property agent in the neighbourhood they want to live in is still the first way people looking for a home think of,” said Wang Haichao, an agent in Shenzhen, who said he has seen a lot of fresh graduates coming to look for a home.
“But young people pick up new technologies very quickly and we might see fierce competition between such online rental platforms and us.”
Meanwhile Lui, who was born in Hong Kong, is considering taking his business there in the future. The city is already the world’s most expensive urban centre to live, and young people’s housing situation is as bad as, if not worse than, that of their mainland Chinese peers.
“I’m hoping that in two to three years, we will bring a better Baletu to Hong Kong to solve the renting issues there,” said Lui.