Long-term home rental segment gaining traction

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Sohu Focus, an internet-based housing data provider, has entered the long-term apartment rental segment.

A Sohu Focus stall displays the company's offerings at a spring property expo in Beijing.[Photo by A Qing/for China Daily]

The move is part of its efforts to emerge as a one-stop platform for all housing-related services.

"This year is very important for long-term rentals," said Fan Gongchen, general manager of Sohu Focus. "That's why we launched our own long-term rental brand."

According to Fan, presence across new homes, pre-owned homes and rental segments is key to be a user-friendly service provider.

"We receive about 2,000 enquiries a day about new homes and 500 calls about pre-owned homes. The market demand is growing," Fan said.

Different from agencies that cooperate with individuals on providing apartments for long-term rent, Sohu Focus engages with mainstream real estate companies and startups that develop long-term rental apartments.

"The competition in this field is becoming increasingly fierce," he said. "And developers will carry out a comprehensive upgrade".

One-third of the top 30 real estate enterprises have already entered the long-term rental segment. More than half of the top 20 have large-scale expansion plans.

Developers, intermediaries, hotel operators and entrepreneurs are active in the market.

"We hope to develop 500 quality agents," Fan said. "We will introduce live-streaming feature on the Sohu Focus app (so that prospective tenants could view apartments before finalizing a visit)."

Property firms are entering long-term rental services in spite of lower returns compared to realty sales.

Yan Yuejin, chief research officer at the E-house China R&D Institute, a real estate think tank, said one way to address that problem is by harnessing the full potential in the rental segment, improving marketing and finding a large number of high-end tenants.

Sohu Focus works with developers who have just a few spare houses. So, the occupancy rate is up to 95 percent.

According to the L+Research Institute, which studies the internet, the stock market and the property industry, tenants will number 190 million by 2020. China's rental market sales will soar from the current 1.1 trillion yuan ($174.1 billion) to 2.9 trillion yuan by 2025.

"Apart from products, what need to be upgraded are services and the pattern of consumption," Fan said. In the future, long-term rental apartments will improve the quality and help lower the price of housing.

Sohu Focus, he said, hopes to cooperate with not only developers and startups but also property agents and landlords.

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