Some landlords in the Huizhongli Community have suspended existing leases with long-term tenants to take advantage of the profitable Olympic period. And many are looking to property agents to get them high rents.
"We estimate rents will go up 500 percent during the Games." said Mr. Yue Fenggang, owner of a housing service company. This especially applies to good quality housing in areas close to Olympic venues, such as Wukesong, Gucheng and Chaoyang districts.
The Olympics are also having an impact on long-term rentals "In the first quarter of this year the average rent in Beijing increased by 17 percent," said Benjamin Christensen, director of the Beijing Research Department of Jones Lang LaSalle, an international real estate services and investment management firm.
Before the 2004 Games the average residential rent in Athens was about 400 to 800 Euros per month, but reached 1,200 to 3,200 Euros during the Games. Such high profits are very tempting to landlords. Even a two-month vacant period before the Games is relatively cost-effective, so some homeowners are refusing to extend leases this year.
Landlord's refusal to renew leases has made the real estate business more difficult. "5i5j", a well-known house-renting company, has recently suffered from a shortage of apartments. Nearly half of landlords on its books refused to re-let when contracts expired this year.
And the pressure imposed on the real estate agencies is soon transmitted to house hunters. Li Ya'ni's happiness at finding a good job in Beijing soon evaporated. "Renting a house is so difficult and rents are so high now."
Li Ya'ni is employed as a graphic designer by a company in the vicinity of the Olympic Park. But rent hikes last year made her relatively-high income "low." Finally, she rented a house out in the suburbs. "The rent over there is much cheaper, 2,000 yuan a month," Li Ya'ni said resignedly. Now it takes her an hour and a half every morning to struggle to work by bus and subway.
"Landlords' expectations for Olympic housing rentals are having a major impact on the lease market." Yue Fenggang said. Prices are going up because landlords are keeping their houses vacant for short-term rentals during the Games. But owners are taking a risk as they may find it more difficult than they think to let their houses.
Faced with a trend of "holding back houses", Benjamin Christensen reminded landlords of the risks of the post-Olympics period. After the short term Olympic effect, rents are expected to drop to the level of third quarter 2007.
Related info: Rent a house during the Olympics
(China.org.cn April 30, 2008)