August 17, 2018 / 12:04 PM / 3 months ago

Beijing authority to clamp down on rental market irregularities as prices soar

BEIJING (Reuters) - Beijing’s housing authority said on Friday it will clamp down on market irregularities that have fueled a spike in rental prices, telling major apartment rental service providers, including Ziroom, to correct their behavior.

In a statement on its website, the Beijing Municipal Commission of Housing and Urban-rural Development said it had held talks with major rental companies on Friday after media reports of surging rents.

Since last year, authorities have been looking favorably on real estate companies that have robust plans to develop their rental businesses as this fits with President Xi Jinping’s pledge to reduce the speculative nature of the property market and help provide affordable housing for those who can not afford to buy.

Policymakers have appealed to banks and insurers to facilitate funding and help accelerate the development of rental markets.

Rental companies are capitalizing on Beijing’s campaign to develop a viable urban rental market. In January, Ziroom - a variation on Airbnb - landed a fresh investment of about $620 million led by private equity firm Warburg Pincus.

The housing authority told the rental companies they should not grab rental listings with above market price offers using funds they procured from banks and other financial channels, which has fueled a “vicious competition”.

It also warned they should not tempt landlords to terminate leasing contracts early with promises of higher prices.

The bureau said it had launched a joint inspection with the Beijing banking regulator and the finance and tax bureaus on rental companies to crack down on such behavior that had rattled the market.

Reporting by Yawen Chen and Beijing newsroom

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