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Long-term rental flats popular among young tenants in Shenzhen

Long-term rental apartments are becoming popular among young people in Shenzhen, but the supporting facilities and regulatory standards of these apartments still need to be improved, the Shenzhen Evening News reported yesterday.

China Construction Bank (CCB), the country’s second-largest commercial bank by assets, unveiled a loan product for tenants earlier this month. Renters can apply for a mortgage loan to pay their rent and related costs in Shenzhen with a credit line of up to 1 million yuan (US$149,254), according to previous media reports.

The bank said the loan is easy to obtain, with a swift one-day approval process, and can be repaid within 10 years.

The bank’s Shenzhen branch signed strategic pacts Nov. 3 with 11 property developers, including China Vanke and China Evergrande Group, and 11 companies and public institutions, including Shenzhen-based automaker BYD and EVOC Intelligent Technology, to launch 5,481 long-term rental homes in Shenzhen.

All of the homes are new and fully furnished, which prospective tenants can rent online through the official CCB app.

Runda Yuanting, a residential estate near Hongshan Metro Station in Longhua District, has put 72 rental apartments up for lease on CCB’s rental platform since the beginning of this month.

Dong Nan and his wife have signed a one-year contract to rent an apartment in the estate. They had lived in Baishizhou for a year before moving to an urban village in the Hongshan area nearly a year ago. Dong said he wanted to find a nice new home for his pregnant wife.

Tenants can rent apartments for as long as five years on CCB’s rental platform. According to the bank, the annual growth of the rent will be specified in the lease contracts.

Cai Xiandong, a young entrepreneur, is also interested in renting an apartment in Runda Yuanting via CCB’s rental platform. Cai said many young entrepreneurs like him are willing to rent an apartment instead of buying one because they don’t want their creativity to be “kidnapped” by the pressure of buying an apartment.

According to the report, the rent and deposit for renting a three-bedroom apartment in the estate for three years costs nearly 300,000 yuan in total. Cai said the bank’s loan product allows him to make a lump-sum payment to rent the apartment with a bank loan, which ensures that he has enough cash flow to run his own business.

Shenzhen-based Vanke has also launched a long-term rental housing project called Port Apartment in 13 cities nationwide. The Port Apartment project located near the high-tech park in Nanshan District opened last March, offering over 300 small rental apartments.

The apartments are equipped with many public facilities such as public kitchens, gyms, pool tables and movie areas for tenants to get acquainted with one another. One tenant, identified as Xing, has made many friends since moving into Port Apartment as he often cooks and eats with other tenants.

Xie Ming, another tenant in Port Apartment, is going to sublease the apartment after living there for half a year because she isn’t satisfied with the apartment’s quality. The apartment building was renovated from an old factory building and the drainage system doesn’t work well. The sewage in the upstairs bathroom has flowed into Xie’s bathroom and dampened the wall.

Li Yujia, a researcher with the city’s real estate research center, said the market of long-term rental apartments is in need of industry-wide standards to tackle problems such as the poor quality of the housing facilities and rent disputes.

Public data shows that Vanke has claimed over 60,000 apartments nationwide for its Port Apartment project, and the number is expected to reach 100,000 by the end of the year. CCB’s Shenzhen branch also announced cooperation with Galaxy Holding to launch 2,600 rental apartments in Shenzhen on Thursday.

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