News >China

    Ministry blames agents for soaring apartment rents

    2010-07-08 07:29

    Beijing - The Ministry of Housing and Urban-Rural Development has blamed agents for first-tier cities' soaring apartment rents amid intensifying public frustration.

    The average rent increased by more than 18 percent year on year from March to June, a survey of Beijing, Shanghai, Guangzhou and Shenzhen by the China Institute of Real Estate Agents under the ministry found.

    Agents purposefully driving up rents while acting as "middlemen" landlords or encouraging landlords to increase the prices are the main reasons for the increases, the Guangzhou-based 21st Century Business Herald reported on Tuesday.

    Centaline Group statistics showed Beijing's apartment rents increased by 2.5 percent month on month in April and by 1.8 percent in May. The year-on-year rise in the capital respectively reached 16.7 percent and 18.9 percent in April and May.

    Rents grew quickly in the four cities from March to April, slowing in May and decreasing in June, the 21st Century Business Herald quoted the report as saying.

    It said that although the average rents did not grow significantly, prices for low- and middle-end housing are surging.

    Zhang Yue, a market analyst from the agency Homelink, said the supply of high-end apartments sharply exceeds demand, while that of low-end and midrange houses cannot meet the demand.

    High-end housing usually refers to homes with rents that cost more than 3,500 yuan ($515).

    A series of macro-control measures cooled down the overheated real estate market this year, decreasing housing agents' incomes. With competition so fierce, some agents are driving up prices to maximize profits, the report said.

    Zhang said housing agents know what places are popular among renters and increase nearby houses' rents to push up costs throughout the area.

    The rising prices will most impact tenants, especially recent graduates who cannot afford the expensive housing, it said, adding there will be a new batch of university students graduating in July.

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