Reforming China’s real estate industry

NOTE: This is the UNEDITED version of the article submitted to the Shenzhen Daily, and published on June 15, 2015.

I recently signed a contract with a new company which meant that I am getting a housing allowance instead of having accommodation provided for me.

I viewed this as a fantastic opportunity for me, as I could finally move in with my girlfriend to an area that would be between both our workplaces to make commuting easy for us both.

Now some of the people that have been in Shenzhen longer than my two years are already laughing at my naivety, and I freely admit that when I came into looking for an apartment, I believed that I would not find it difficult. The internet has revolutionised finding apartments in western countries, with real estate agencies being held to high standards and numerous websites available for prospective tenants to compare prices across suburbs and districts.

However, when I came to look for apartments here in Shenzhen, I found that the opposite was true. Ringing a phone number attached to an online advertisement would often result in a number no longer being in service. The photos were clearly not real, just by looking at them. What I found most infuriating was having real estate agents inform us that the monthly rent they were advertising was not, in fact, the monthly rent, but was a figure that could be anywhere from ¥700 to ¥1000 below the “actual” monthly rent for the apartment.

Now, I accept that I come to China from a country with laws about truth in advertising and the like, but given the recent announcements in China about changes to its rules around advertising food, I have reason to think the government needs to examine the real estate industry. 

Admittedly, this is a personal bugbear of mine, and we did find an apartment of our own after skipping the agencies altogether, the point is that this approach by real estate agencies hurts everybody. It reduces the level of trust in one of the biggest employers in the People’s Republic of China, at a time when the government has a vested interest in having residential properties bought and sold as often as possible. Potential tenants quickly learn which agencies to talk to, and conversely, which agencies not to talk to. The government suffers by reduced taxes as a result of tenants settling for lower priced accommodation, instead of what they truly wanted. Real estate agents have abuse hurled at them by potential tenants because of the incorrect information and by clients because of the lack of tenants.

The lack of transparency in the real estate industry is going to need to change in multiple areas. I am sure that there are many expats with their own thoughts about this industry and I’d love to read about it.