Property market needs sound policy foundations

China's aging population presents great rental potential, but professional services are vital

My 83-year-old landlord, a former secretary at a European institution, moved out of the two-bedroom apartment in downtown Brussels where my family now lives for an elderly care home three years ago. Recently, she paid her first visit in three years to check on the property.

She was satisfied: The rooms were clean, we're getting on with our neighbors, and we pay the rent and other charges on time.

But, as she said goodbye next to the building's narrow European lift, she turned to me and politely asked in broken English: "Did my lawyer write to notify that you need to pay 11 euros ($12) more from next month?"

To live a quiet life in her care home, she had entrusted a lawyer to deal with me after the lease was signed. As it is now summer, the lawyer had sent me a message to say he is on holiday.

"There is an index in the contract," she said, which I knew referred to an article that allows her to increase the rent in line with Belgium's annual inflation rate. I nodded, and she added: "Is it possible for you to pay the rent before the 6th day every month, so I can pay the care home with my pension?"

My family moved into the apartment on July 10, 2012, and we had agreed to ensure the rent payment arrived in the landlord's bank account every month on the 10th. As I have a strict financial procedure, I was not sure whether I was able to satisfy her.

When I initially visited the apartment, before making a decision to rent it, the elderly woman told me she needed to move to a care home, and that with the rent she could live a comfortable life. Without a second thought, I decided to support her and signed an agreement.

Talking with her about the rent hike after her first inspection three years later, I said I would try to ensure the money was paid on the 6th. We shook hands, and she left a happy woman.

In writing about this experience, I aim to share two policy implications for China's decision-makers as my country radically implements market-oriented reforms for the housing sector.

First of all, who are the players in this market? In this case, the tenant and the landlord are important, but their bridge, the lawyer, is essential.

Today, property rental is booming in China. But, in many cases, property owners have been dealing with clients directly. In fact, professional services are badly needed, and new actors should intervene by offering qualified help, especially when elderly people want to rent out their properties.

China is an aging country, so there is great potential in forming a chain to keep every actor happy, especially elderly property owners.

Second, the market should decide - with the government's sensible regulation and intervention - on a "stable and prospective" overall pricing level, instead of massive fluctuations.

In general, China has faced huge challenges in stabilizing its property market prices. On the one hand, sellers and some businesses have cheered the increase in prices, while others have complained due to their limited purchasing power. Many people have labeled China an "expensive" country.

In spite of difficulties caused by financial and debt crises, the eurozone, which consists of 19 countries and 300 million consumers, has successfully kept its inflation rate below 2 percent since the birth of the euro currency. This is a great success for ordinary people, although some may say this means the market is inactive.

I believe that making the market "affordable", preventing sharp ups and downs in the overall pricing level, and ensuring actors in the market behave are the urgent roles of the government.

As China's leadership puts together their 13th Five-Year Plan (2016-20), I trust they will list stable houses prices as a policy target. If this can be delivered, the government will have fulfilled its responsibility.

The author is China Daily chief correspondent in Brussels. Contact the writer at fujing@chinadaily.com.cn