China will encourage companies to conduct rental housing asset-backed securitization, in a bid to promote the development of the housing rental market, as well as further curbing risks in the property sector, according to an announcement jointly issued by China's securities regulator and housing ministry.
Priority in securitization promotion will be given to large and medium-sized cities, as well as the Xiongan New Area in North China's Hebei Province and other national policy support areas, according to a statement posted on the official website of the Ministry of Housing and Urban-Rural Development on Wednesday.
The statement also said a "green channel" will be established to speed up the issuance process, including optimization in all related procedures such as application, acceptance, review and issuance.
Companies have to meet specific conditions to become issuers of such securities. For example, they have to demonstrate a clean record of abiding by relevant rules in the past two years, the statement said.
The statement also stressed that regulators should properly evaluate rental assets and deal with intermediaries and issuers in a responsible manner.
A series of house rental policies have been launched since the end of 2017 as part of China's aim to provide a long-term solution to an overheated real estate market by encouraging more people to rent rather than buy.
For example, a house rental policy in Beijing said that the education rights of tenants' children will be ensured and people renting government-subsidized housing can have their hukou (household registration) transferred to their rented homes.
In Beijing, it is expected that 6,000 hectares of land will be used for residential housing by 2021, 30 percent of which will be for rental housing.