Shanghai aims to build hostels that offer 200,00 beds to attract young talents

The country is trying to meet the rapidly increasing demand for affordable accommodation and control soaring home prices  

Shanghai, mainland China’s commercial and financial capital, plans to build 220,000 rental homes by 2025 in order to meet the rapidly increasing demand and control home prices, reported South China Morning Post.  

This number is more than 45 percent of the number of rental units built in the last five years.  

In its efforts to become a global hub of technological innovation, Shanghai will attract young professionals by also building hostels that can offer 200,000 beds.  

The local government noted in the latest five-year plan for house market development in Shanghai that healthy growth of the property sector would provide residents “a sense of gain, a sense of security, and a sense of comfort.”  

Over the last five years, Shanghai has effectively responded to the central government’s aim to lower the cost of living for ordinary people by building 150,000 rental units.  

Establishing a transparent rental market has been the goal for Chinese authorities. As a result, tenants are now granted the same rights as homeowners in terms of education and employment.  

You Liangzhou, owner of property agency Baonuo in Shanghai, said, “Allocating more land for rental homes will effectively help the city contain wild gains in home prices. With more homes for renting, many young professionals will feel relieved because they do not have to amass a big sum of money as a down payment for a flat.” 

Shanghai is one of the country’s least affordable cities to rent or buy a home. An average two-bedroom, pre-owned flat could go up to more than RMB10 million (USD1.54 million), which is beyond what a young wage earner of RMB10,000 could afford. 

Home prices in Shanghai climbed monthly between December 2019 and May 2021, causing housing bubble concerns among city officials.  

More: China’s new home prices slowdown as cooling measures take off

The city has been encouraged by the Communist Party’s Central Committee and the State Council to develop core technologies in semiconductors, artificial intelligence, biotechnology, and civil aviation. 

Hong Lingyun, a senior executive with recruitment services firm Joinlink Consulting, said, “Lofty home prices are a stumbling block for Shanghai’s rise because talented engineers will baulk at the prices and decide not to relocate to the city.”