The housing rental industry in China, which is expected to see robust demand and stable supply, is a “crucial direction” for the new development model of the country’s real estate market in the future, the People’s Bank of China (PBOC) said on Saturday.
Given the profound changes in the supply and demand dynamics of the real estate market, the scale of existing housing in China is already very large, the central bank noted in a report on monetary policy implementation.
On the demand side, market institutions project that the population in China with rental needs will exceed 200 million, and the market potential is relatively large, the PBOC said, adding that demand is rising among key groups, including recent graduates entering the workforce and low-income individuals in recent years.
On the supply end, with the recovery of the rent-to-sale ratio and the reduction of financing and operational costs, the commercial sustainability of the housing rental industry has been enhanced in recent years.
As a result, an increasing number of housing rental enterprises have entered the market, and their large-scale and intensive operations are expected to deliver high-quality and more stable rental housing services, the PBOC said.
The central bank has beefed up financial support for government-subsidized housing by establishing a re-lending facility for such projects, according to the PBOC.
By the end of June, China’s financial institutions issued 24.7 billion yuan (about 3.46 billion U.S. dollars) in rental housing loans, with the balance of government-subsidized housing re-lending facility amounting to 12.1 billion yuan.
In the next step, China will improve the financial support system for housing rentals and direct more social capital investment into the sector, the central bank said.
It added that a sustainable business model will be established to support the de-stocking of existing commercial housing and help promote the transformation and development of the country’s real estate industry.