Dismantling the business model of leasing companies
Time : 01-25-2019 Click volume:0
Recently, rents in Beijing and other areas have risen too fast, causing widespread concern. With the original I love my vice president Hu Jinghui's “bombing” long-term rental apartment operation and the departure from my love of my family, it has caused more controversy over long-term rental apartments. Staged a "good show." Behind this "good play", bring more thinking to the market. First of all, long-rent apartment institutions have been driven by interests, and there have been problems such as vicious competition, which have had a certain impact on the market. Secondly, the imbalance between market supply and demand is obvious, especially in some big cities and high-quality housing. It will also affect rents to a certain extent. Therefore, some cities need to increase supply. The most important thing is that although some related policies have been introduced in the housing rental market, they have not been completely refined. At the same time, supervision is relatively lacking. Therefore, it is necessary to improve policies and fill shortcomings. (Zhang Xing)
The 2018 China Housing Leasing White Paper jointly published by the Shell Research Institute and the 21st Century Industrial Research Institute pointed out that since 2015, the policy on the leasing market has entered a period of intensive release, but it has to be refined and implemented.
The debate triggered by the rise in rents in Beijing continues to ferment. The various capitals that have been deeply involved in the housing leasing industry in the past few years have been accused of being an important “culprit” in pushing up rents in this round of debate. How to regulate capital behavior and prevent vicious competition has become one of the focuses of controversy.
More than capital, it is not difficult to find out in China's leasing policy. There are a large number of regulatory blanks in terms of data acquisition, industry regulation, supply mechanism, and tenant rights protection. This is determined by the objective reality of the leasing of the leasing policy, but it has led to information asymmetry in the leasing market, which is not conducive to market stability, but also makes adjustments to the leasing market more limited.
In response to the current situation of the Beijing housing rental market, on August 19th, the Beijing Real Estate Agents Association held a symposium, and the heads of 10 major housing leasing companies such as Freedom, Xiangyu and Eggshell Apartments participated. The parties have jointly promised not to engage in vicious competition and to promote rents while increasing supply.
But most people in the industry still look forward to substantial changes. That is to say, with the turmoil, the construction of various “infrastructures” in the housing leasing market will be strengthened, and at the same time, the rights and interests of all parties will be protected, so as to better meet the era of “rental and sales”.
In the official statistic of the National Bureau of Statistics, the statistical indicators for the housing rental market are far less than the trading market. Among the trading indicators, there are basic indicators such as volume and price index, as well as indirect reference items such as land transactions, investment scale, and capital status.
For the statistics of the leasing market, there is only one “rental rent” index, and it exists as a sub-item of the eight categories that constitute CPI, which is not very eye-catching.
This single source of data makes it difficult for regulators and researchers to have a comprehensive understanding of the rental market. “The lack of basic data in the leasing market, in addition to the number of listings on the supply side, there is no population increase and flow on the demand side.” Gu Yunchang, director of the Housing Policy Expert Committee of the Ministry of Housing and Urban Development, told the 21st Century Business Report that when monitoring changes in the rental market, There are few indicators available for reference.
To some extent, this is due to the fragmented and volatile nature of the rental market. Chen Lei, chief analyst of Zhuge Fangfang Data Research Center, told the 21st Century Business Report that the current rental housing is extremely fragmented, with sources such as institutions, second landlords, and personal direct rents, and there are more leasing agencies, mainly small intermediaries. At the same time, the rental housing is more mobile and the data accumulation is difficult, so the rental market data is relatively small.
Chai Qiang, vice president of the China Real Estate Appraisers and Real Estate Agents Association, believes that although China has long carried out the filing of housing lease contracts, for various reasons, there are very few cases for real filing. This has led to the rental market not retaining enough transaction data as in the case of second-hand housing transactions.
In recent years, some large cities have begun to implement the system for signing and filing of housing lease contracts in accordance with the requirements. However, due to the late start, it will take time to fully record them.
In the eyes of most respondents, there are deep institutional reasons behind this. On the one hand, the leasing market has obvious regional characteristics. From the central government to the landing, the policy needs to be combined with local realities and needs manpower, material resources and financial resources to support it. In the short term, it is difficult to achieve overnight; on the other hand, real estate in recent years. The buying and selling market is booming, and local regulators are focusing on this area, while neglecting the relatively small rental market.
A person in charge of a well-known intermediary agency in Beijing revealed to the 21st Century Business Herald that in recent years, he has repeatedly invited the Ministry of Housing and Construction, the Beijing Municipal Housing Construction Committee and other departments to participate in the real estate market discussion, but there are very few special discussions on the rental market. Most of the time, we are exploring the trading market and taking more of the rental market.
It is reported that in the absence of first-hand data, regulators mainly obtain leasing data from major intermediaries. However, these institutions have limited market share, different business strategies, and different statistical calibers. Even if the information is pieced together, it is difficult to reflect the overall picture of the market.
Due to the lack of data support and the fragmentation of the rental market, the regulatory measures for the rental market are very limited. The aforementioned practitioners said that the government has always relied on “inspection and interviews” on the management methods of the leasing market, while the rest relied on “industry self-discipline”.
Compared with the buying and selling market, this approach lacks both a price guidance mechanism and a limited adjustment to the supply side. Therefore, the control effect on the leasing market has not been satisfactory.
Policy rules need to be grounded
In recent years, multi-channel capital has entered the rental market and has cultivated a number of large leasing institutions. The unfair competition of large leasing institutions in expansion is considered to be one of the reasons for pushing up rents.
In Chai Qiang's view, some leasing companies do have vicious competition. However, the argument that large institutions have pushed up rents has been over-interpreted. According to the market share of leasing institutions at this stage, it is still far from the level of monopoly.
He also believes that the general direction of cultivating specialized and institutionalized leasing companies should not be denied. Chai Qiang told the 21st Century Business Herald that large leasing companies can provide better leasing quality and help the market to become more standardized. From a regulatory perspective, these companies are more conducive to management and can provide more and more valuable market data.
However, Chai Qiang said that attention should be paid to the monopoly propensity and abnormal competition of large-scale leasing enterprises in the expansion, and timely stop them.
Gu Yunchang believes that this round of debate on rents is expected to be an opportunity to improve the policy of the rental market. In his view, under the broad framework of real estate regulation and long-term mechanism, renting and selling and housing system, the “infrastructure” of the housing information census and leasing information platform construction is gradually improving, so as to provide basic data for the industry as soon as possible.
Chai Qiang also said that with the advent of the era of renting and selling, the policies on the leasing market will continue to improve, and will involve all levels of supply and demand, supervision and so on.
Gu Yunchang said that it should also pay attention to the relationship between the leasing market and the buying and selling market. In addition to the linkage mechanism of the two markets, there are also indicators such as “rental-to-sale ratio”. In addition, as an important part of market demand, population movements in large and medium-sized cities should also be closely watched.
He also believes that protecting the rights of tenants should also be the focus of policy attention. Because "when a tenant feels unsafe, they will not stay in the rental market for a long time," and this insecurity is mainly due to the cleanup of the property and the constant adjustment of rent.
As for the high rent in the current Beijing market, Hu Jinghui, who just resigned from the position of vice president of my family, suggested that “through the nation’s housing construction system, the national rent guidance price will be quickly established and publicized to the people every month”. Some insiders believe that the rent should be adjusted directly.
However, Chai Qiang believes that the adjustment of the rental price should be cautious. Because direct control of rents has advantages and disadvantages, it has always been an academic problem. However, it can be adjusted indirectly by adjusting the supply and demand.
The 2018 China Housing Leasing White Paper jointly published by the Shell Research Institute and the 21st Century Industrial Research Institute pointed out that since 2015, the policy on the leasing market has entered a period of intensive release, but it has to be refined and implemented. Judging from the existing content, the future policy trends include “not limited to” five directions: collective land construction and rental housing, withdrawal of provident fund to pay rent, rent deduction of individual tax, rent and purchase rights, and tenant rights protection.