Rents in China Becoming Unaffordable

The article fails to support its headline, in fact, asserting that rents have been increasing since mid-2010. In any event, the average Chinese are really getting pinched.

China: Property tax rule pushing up cost of renting

Xue Jianxiong, an analyst with the China Real Estate Information Corporation, said landlords in recent years have charged rents that have been too low to cover the cost of investing in rental properties. Landlords are now trying to make up for those losses, as well as trying to ensure that their incomes keep pace with the rising cost of living.

"In the past several years, property prices have not been the only thing that has jumped; commodity prices have undergone a huge increase as well," he said. "Besides, the introduction of the property tax is also adding to the cost of property investment, and landlords are very likely to transfer all of the new costs to tenants."

It's impossible for landlords to cover their purchase cost, given the price to income ratio. Something will have to give.

I have an idea. Shanghai should put a 20% tax on unoccupied apartments. That would solve many problems all at once.