CCB explores long-term home leasing

Updated 2018-03-27 16:49:05 China Daily

China Construction Bank Corp is exploring long-term home leasing as a way to offer financial services to high-quality clients, and is helping to reduce housing inventory.

Specializing in mortgage services, CCB, the country's second largest commercial lender by assets, marched into the home leasing market in 2017.

"We are trying to encourage individuals, companies and government institutions to lease their vacant second or third homes for longer terms, varying from three to 10 years, in addition to persuading real estate developers to lease, rather than sell, some of their houses," said Pang Xiusheng, executive vice-president of CCB, at a recent news conference.

In January, the bank launched a pilot program in Guangzhou, Guangdong province, to assess the rate of return for leasing individual homes during the next three to 10 years. If the homeowners are satisfied with the results, the bank will help them to sign contracts for the transfer of the rights to operate home leases with home rental companies.

Two months after the launch, 408 homeowners in Guangzhou filed applications for leasing their homes with the help of CCB, and an additional 500 will join the market soon.

"Some homeowners came to us to avoid the trouble of looking for a quality home rental company and having to sign a leasing contract every year," said Liu Jun, general manager of CCB's Guangdong branch.

"Clients chose CCB because we improved the credibility of different parties involved with home leasing," Pang said.

In this way, the bank will help homeowners liquidize their property. It will also help real estate developers reduce housing inventory, as developers change their mindset due to government restrictions introduced to cool the housing market.

"Many large real estate developers are discussing cooperation with us in home leasing. They have realized it is the future. To deflate housing bubbles, we must build a home leasing market," said Wang Yi, general manager of CCB's housing finance & personal lending department.

The bank will provide financial services such as handling rental payments, which will generate profits for the bank, Wang said.

To date, a total of 120,000 homes have been offered for rent on CCB's home leasing platform and more than 26,000 have already been rented.

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