Several local governments in China are trying to boost rental market to curb property prices. Officials say the policies will give tenants equal rights as homeowners but an expert said the policies would have limited the impact on the residential prices in the short term.

The Ministry of Housing and Urban-Rural Development recently instructed 12 cities including Guangzhou, Shanghai, Shenzhen and Nanjing to start pilot programs concentrating on the expansion of their rental markets.

The regulation is part of a larger plan to increase the number of renters and curb high-flying property prices. But Joe Zhou, Head of Research at Jones Lang LaSalle, a global real estate services firm specializing in commercial property and investment management, assumed the policies might have limited influence the housing prices in the short term.

“I think in the short term, its impact on the residential price will be very limited. Previously, these markets were dominated by individual owners. And now the governments want to encourage the developers to do the leasing properties. But at the moment, the scale is not big enough. It only started to test a little bit in Shanghai. And the rest of the cities just sent out the detailed plan, no actions have been taken,” Zhou stressed.

For older generation in China, houses sometimes symbolize “wealth” or “fortune.” Zhou thinks that the regulators should focus more on the young generation, as there are plenty of tenants leaving big cities, back to their hometown, due to the high home prices. 

Based on Zhou’s words, the positive rental policies would make the young generation re-consider coming back to big cities.

“Once the young people choose one city to live and work, they start to think about the living cost. If the market provides another option [except buying house] for them to live in the city, it will be good for them. And it will make Shanghai and Beijing more attractive in the future,” Zhou added.

(CGTN’s Wang Lihuan also contributed to the story)