Thunder Explosion And Regulation: Leasing Market Ushers In The Era Of Strong Supervision

If we look back many years later, 2020 is likely to be an important turning point in the leasing market.

Demand shrinking under the epidemic situation, rent reduction storm, eggshell capital chain crisis All kinds of events make this year's leasing market turbulent. After the rapid development in the past few years, the leasing industry is ushering in a painful period. At the end of the year, the regulatory authorities mentioned the leasing market for many times, which made the industry feel like a "big mess".

According to the recent data released by Shell Research Institute, the average monthly rent of 40 key cities in China will be 2976.8 yuan / month, a decrease of 10.5% year-on-year. Among them, only 3 cities had a year-on-year increase in rent level, 5 cities were flat, and the rest 32 cities were all in decline.

The shrinking demand brought about by the epidemic is, of course, the cause of the market downturn, while the loss of confidence caused by events such as breach of contract and thunderstorm is considered to be the long-term impact on the market.

Most institutions believe that market adjustment and regulation will be the main theme of next year. Under the positioning of "complementing the short board", the leasing market is about to usher in an era of strong supervision, and the industry is expected to bid farewell to the "savage growth".

Intensified epidemic situation and industrial adjustment

Among the 40 key cities surveyed by shellfish research institute, only Shanghai, Xiamen and Fuzhou saw a slight increase in monthly rent last year. The monthly rent of Shenzhen, Xi'an, Lanzhou, Shijiazhuang and Wuhu was basically the same, while the other 32 cities showed varying degrees of decline.

Zhuge housing data research center, another organization, has come to a similar conclusion. Among the 40 cities surveyed by the organization, the rent drop in Sanya and Weihai last year was more than 10%. In Shenzhen, where housing sales were booming, rents fell by 5.9%, while in Wuhan, once the epicenter of the epidemic, rents fell only 1.5%.

Behind the decline in rent is the increase of bargaining space and the lengthening of transaction cycle.

According to the data of Shell Research Institute, in 2020, the bargaining space of tenants in 40 key cities in China will be 5.2%, up 0.2% year-on-year. Due to the impact of the epidemic, the bargaining space of tenants in March and April was the highest in the year, reaching 5.6%. Although the average price of newly listed houses decreased, the tenants still had a stronger bargaining power.

The agency also pointed out that in 2020, the transaction cycle of housing resources in 40 key cities in China will be 48.9 days, an increase of 11.7 days or 30.8% year-on-year. The transaction cycle of customer source was 9.5 days, 4.4 days longer than that of last year, with an increase of 84.5%. "The transaction cycle of tenants maintains a high level throughout the year."

On the one hand, because of the epidemic situation, rental demand is weakened, and tenants have more choices of housing resources. On the other hand, tenants are more cautious about the quality of housing, housing location and supporting facilities, and the decision-making cycle is longer.

In fact, behind the appearance of the impact of the epidemic, the rental market itself has entered a period of adjustment. Statistics from several institutions show that since 2019, rent levels in hot cities have stopped rising or even falling, and the epidemic situation has become the "accelerator" of this adjustment.

Since the regulatory authorities first proposed "simultaneous development of rent and sale" in 2014, the leasing industry has ushered in an opportunity for rapid development. But in recent years, the excessive pursuit of capital has led to local overheating of the industry, and the market has begun to adjust spontaneously. For example, the phenomenon of small and medium-sized long-term rental apartment operators has appeared sporadically, and the rent in hot cities has also dropped after climbing all the way.

In 2020, the epidemic situation will aggravate the shock of the industry. In the first half of this year, free, eggshell and other long-term rental apartment operators negotiated with some owners to reduce the rent during the contract period, and even unilaterally broke the contract. At the end of the year, the eggshell apartment had a capital chain crisis, which damaged the rights and interests of landlords, tenants, financial institutions and employees, which was also the biggest crisis in the history of the leasing industry.

Affected by this, the number of long-term apartments with explosive thunder and "runaway" has increased sharply. Since August, friends, nesters, lanyue and other long-term rental apartments in Hangzhou, Shanghai, Chengdu and other places have been exposed to be on the run, and long-term rental apartment enterprises such as Mancheng in Sichuan and manlicheng in Chongqing have also been exposed to be suspected of running away. According to incomplete statistics, more than 80 long-term rental apartment brands will explode in 2020, of which at least 10 enterprises' capital chain has broken in August alone.

Regulatory increase is imminent

2020 is also the "big year" of long-term apartment policy. In August and September alone, Shanghai, Chengdu, Guangzhou, Hefei, Hangzhou and other cities issued housing rental market risk tips due to the large number of thunderstorms.

On September 7, the Ministry of housing and urban rural development issued the housing leasing regulations (Draft for comments), which is divided into 8 chapters and 66 articles, comprehensively standardizing the rights and obligations of lessors, lessees and leasing enterprises, and has become the most important top-level design document in the housing rental industry.

In the central economic work conference held at the end of the year, the leasing industry was mentioned in a large space, and it was proposed that "the order of the leasing market should be rectified, the market behavior should be standardized, and the rent level should be reasonably regulated."

On December 21, the "national housing and urban and rural construction work conference" also mentioned the rental market, and put forward the view of "accelerating the supplement of rental housing short board" for the first time.

China's leasing market started very early, but the real rapid development is still in recent years. From 2017 to 2018, the industry entered a period of rapid expansion. With the support of capital, many enterprises expand their scale rapidly.

The main business model of leasing institutions is to earn rent difference through "low in and high out", and earn commission and related service fees in the transaction. Due to the purchase and standardized decoration, the scale effect can dilute the cost to a certain extent. However, in the process of expansion, vicious competition such as driving up the price of housing resources often appears. Some enterprises excessively rely on the abnormal development mode of "high in, low out" and "long-term income and short payment", which also lays the groundwork for the subsequent market adjustment.

At the same time, compared with the housing sales market, the policy of rental market is not enough. Among them, the lack of top-level design documents not only means the absence of the system, but also affects the implementation of existing policies to a certain extent.

A senior employee of a long-term rental apartment in Beijing told the 21st century economic report that many existing policies and measures can "suit the remedy to the case" in terms of regulating the rental market, but these policies are mainly based on departmental regulations and lack of compulsory effect in implementation. At the same time, in recent years, the leasing market has developed rapidly, and new situations have emerged, and some policies and measures have lagged behind.

According to the source, the regulatory level has a high standard of attitude towards the leasing market, and the policy content is also very detailed. In the future, the industry may bid farewell to the "barbaric growth" and usher in the era of strong supervision.

Zhang Bo, President of anjuke Real Estate Research Institute, told 21st century economic reporter that leasing will become the development focus in 2021, and the key words are to expand supply and strengthen management and control. On the one hand, in the future, the number of enterprises participating in the leasing industry will increase, and the supply of rental housing and land will be enhanced to meet the growing demand for leasing; on the other hand, the government will further strengthen the importance of the leasing industry, continuously provide financial and tax support, and strengthen the financial supervision of long-term rental apartments, and improve the rent changes in various regions Supervision.

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