Shanghai imposes cap on rents for affordable housing as costs rise

Beijing

CHINA'S financial capital, Shanghai, will cap rental increases for low-cost housing at 5 per cent per year, to officially limit how fast rents can climb in one of the most expensive cities to live in the country.

Rents for affordable housing should also be no more than 90 per cent of the rental value of other housing types in the same location, Shanghai's Vice-Mayor Tang Zhiping told a news conference on Tuesday (Nov 23).

Rents in Shanghai have risen an average of 10.5 per cent from January to October this year, according to Reuters calculations based on data from Zhuge House Hunter, one of China's largest independent real estate research firms. That compares with a 5.1 per cent gain in 2020.

Some of the biggest cities on China's eastern coast have ramped up efforts in recent months to address housing cost issues faced by young people or recent arrivals from other provinces, under President Xi Jinping's "common prosperity" campaign to improve living standards and make society fairer.

Hangzhou, in the wealthy province of Zhejiang, has pledged to allocate at least 10 per cent of new residential land for affordable rental housing each year, joining the southern metropolises of Guangzhou and Shenzhen to meet rising demand as their populations grow.

Shanghai will provide 470,000 units of affordable rental homes from 2021 to 2025, with 240,000 units to be offered in 2021 and 2022.

The authorities are stepping up efforts to boost affordable rental housing from 2021 to 2025, with 400,000 units in the southern tech hub of Shenzhen, 600,000 units in Guangzhou and 300,000 in Hangzhou. REUTERS