An increasing number of Chinese banks are stepping up efforts to explore the domestic housing rental market by seeking ties with property developers to co-construct apartment rental projects.
Bank of China (BOC) will reach suppliers of domestic property developers such as China Vanke Co and Longfor Properties Co to find out what they need, and will imbed relevant functions into BOC's system and platforms to meet the demands of its partners, news site cs.com.cn said Monday, citing a person close to the matter.
On Friday, the Shenzhen branch of China Construction Bank (CCB) in South China's Guangdong Province signed housing rental strategic cooperation agreements with 11 real estate companies, including China Resources Group, Vanke and Evergrande Group, as well as 11 other enterprises and institutions to unveil more than 5,000 apartments for long-term renting, the Xinhua News Agency reported.
China CITIC Bank also inked a cooperation agreement with domestic property giant Country Garden on October 30, aiming to provide 30 billion yuan (.5 billion) in security funds for the developer in the long-term apartment rental sector for three years, according to media reports.
Cooperation between banks and property developers showed that "financial institutions are continuing to innovate their businesses to match the demand in the future home rental market in China," Yan Yuejin, a research director at the Shanghai-based E-house China R&D Institute, told the Global Times on Monday.
Yan noted that as banks such as CCB begin to explore the long-term apartment rental market, they will also consider the demand of home rental loans in the future, aiming to provide more financial support for China's housing rental sector.
"Housing rental loans are likely to be transferred to operators of long-term apartment rental institutions instead of to tenants," said Yan.