Home rentals in major Chinese cities in February spiked compared with the same period last year, with rentals in Beijing, Shanghai, Guangzhou, and Shenzhen rising 18.9 percent, 18.7 percent, 17.9 percent, and 16.6 percent, respectively,   reports China Securities Journal, citing Century 21.

On a monthly basis, rentals in Beijing, Shanghai, and Shenzhen rose 1.7 percent, 1.2 percent, and 0.6 percent, while rentals in Guangzhou fell 0.2 percent.

According to a Beijing local cited in the report, a two bedroom apartment in the capital city could be rented for 4,000 yuan per month at the beginning of 2011. The spike in rentals has made it impossible to rent similar apartments for less than 5,000 yuan per month.

Century 21 said rentals in Beijing rose 13 percent in 2010, and 18.9 percent in 2011. Landlords are now asking for additional rental fees of between 600 yuan and 800 yuan per month for two bedroom apartments upon the expiry of rental contracts.

According to industry insiders, due to the property purchase limitations, housing demand has shifted to the rental market. With Beijing and other major cities having large populations and huge inflows of new residents each year, demand for rental homes  has now exceeded supply.

More than 700,000 people come each year to Beijing, and they are inclined to stay for an extended period of time, according to the Chinese Academy of Social Sciences.

Market analysts said a majority of those coming into Beijing each year are not qualified to buy homes, and this will increase the number of renters to 1.8 million.

Rising inflation last year was another factor which led to the spike in home rentals, and the increase in office rentals helped to drive up home rentals, added the analysts.

Source:capitalvue.com