BEIJING, Nov 3 (Reuters) - China’s second biggest bank, China Construction Bank, has unveiled a credit loan product for home renters, the first of its kind, as the government looks to develop the rental housing market, the People’s Daily said.
Renters can apply for the loan to pay rent and related costs in the southern boomtown of Shenzhen with a credit line of up to 1 million yuan ($150,879), the official newspaper said on Friday.
The bank says the loan is easy to obtain, with a swift one-day approval process and can be repaid within 10 years, it added.
As property prices have shot up, driven by speculation and demand from a growing middle class, rental yields have eased to multi-year lows, with the rental market having long been underdeveloped and largely unregulated.
The bank’s Shenzhen branch on Friday also announced strategic pacts with 11 major developers and rental firms, including China Vanke and China Evergrande Group , to launch 5,481 long-term rental homes on the Shenzhen market, the paper said.
The bank’s involvement has “eased developers’ financing concerns over return on investment and thus their reluctance to enter the rental market”, it quoted Wang Feng, the director of the Shenzhen Real Estate Research Center as saying.
China announced plans in August to launch pilot programmes in 13 major cities, including Beijing and Shanghai, to build rental housing projects in an effort to ease a housing shortage. ($1=6.6278 Chinese yuan renminbi) (Reporting by Yawen Chen and Beijing Monitoring Desk)