Shenzhen’s Housing and Construction Bureau opened applications online this week for 248 sets of renovated apartments in Tanglang City Plaza. These are not just any kind of apartments, however: their rents are set at a monthly baseline averaging RMB110 per sqm (slightly adjustable for bigger units and higher floors), which is significantly below the market average of RMB139.6 per sqm in the surrounding Nanshan district, home to many of the city’s tech companies.
Moreover, here’s the kicker: rents in these units will be controlled. Annual fluctuations will not exceed 5%, up or down. Successful applicants can take leases of 1-3 years, which can be renewed, but for a maximum total of five years.
Analysts quoted by local media said they thought the new units would have minimal impact on the market in the near term. He Qianru, director of the National Research Center of Midland Real Estate, said it was still difficult for the government to control rental levels in the private market, due to the small sample size. However, in the longer run, it depends on how many units the government puts into the market.
The government says it wants to put at least 30,000 of these units into the market by the end of next year. That might sound like a small number in a population of nearly 14 million, and considering that Shenzhen attracted more than 400,000 new migrants last year. But this is in addition to the 46,000 units of rental housing the city brought online last year for “talents” – people the government wants to attract to Shenzhen due to their skills and/or education levels.
The new units are aimed at people who have already settled in Shenzhen for more than a year, but have not yet purchased homes. They are considered quite attractive for those working not only in Nanshan, but also in Qianhai, Chegongmiao and Futian since the Tanglang Station of Shenzhen Metro Line 5 is connected directly with Tanglang City Plaza.
The first lease cannot be not less than one year or more than three years. Renewals are possible, but cannot take tenants past a five-year limit in sum.
Tenants can conduct the whole leasing process through the “stable rent housing rental system”. Submission of applications, qualification verification, housing matching, and signing can all be done online.