China clamps down on risks in rental housing market
China will curb financial risks in the rental housing market by tightening lending to rental housing companies and capping the ratio of their rental income from loans taken by tenants at 30%, the housing ministry said on Wednesday.
The Chinese government has vigorously promoted the rental housing market since 2017 to address housing affordability as home prices skyrocketed across the country. But rapid growth in the sector with little regulatory control has created unexpected financial risks.
The ministry described the sector’s development as “chaotic”, saying it had been filled with false listing information and malicious practices such as misuse of loans, illegal withholding of security deposits and forced evictions.
The ministry will work with five other government entities, including the banking and insurance regulator and the state administration for market regulation, to better police rental companies, real estate agencies and online platforms, according to a guidance published on its website.