Benjamin Pollock from DTZ Real Estate cools your Olympic real estate concerns
Q: My landlord wants to kick me out of my apartment just before the Olympics. What’s going on?

A: There is a possibility your landlord wants to have the option to rent his property at an inflated rate during the Games, but it could also be simply a sign of the times. The Olympics actually will not have that much of an impact on Beijing real estate sales, and although rentals will certainly be influenced short-term, the potential for increased prices post-Olympics will depend on the strength of the economy. What’s really driving sales increases across the board is the strong growth of the Chinese economy. This growth is caused by exogenous factors like a rise in overall productivity, increasing discretionary incomes and strong economic activity, not the Olympic Games. The Chinese government is working hard to control the country’s rapidly inflating gross domestic product (GDP), and they have imposed strict monetary policies that affect the real estate market. Basically, they’ve increased interest rates and have made it harder to get a loan to buy a house. Although these monetary policies do not reflect the current global economy, this is one of the ways China is controlling the country’s intensifying inflation levels and ensuring long-term economic growth.

Landlords who are restructuring their leases to take advantage of a temporarily inflated Olympic market are more than likely owners of lower-to-mid range properties, like the student housing market. Contracts signed in such tenancy markets are usually less formal and less watertight than those in the higher end of the market, leaving gaps and loopholes that can easily be taken advantage of. Tenants at the higher end of the market can use an intermediary, usually their real estate agent, to moderate the case and help ensure a winning situation. This is harder to do for tenants on the lower rental scale, as they don’t go through an agent and can struggle to make a case against a substandard leasing contract.

Cutting short a tenancy agreement is not illegal if the contract is not watertight. Check your contract thoroughly (before signing is best). Also consider asking for help from your building’s management. This can be awkward as these “basement leasing agents” usually have solid relationships with landlords, making it harder to defend your position. Language barriers and a potentially shaky contract can make things even more difficult.

If your leasing contract lets you down, get in quick and sign another lease elsewhere. With Beijing expected to accommodate 300,000 visitors for each day of the Games, tourists will soon be snapping up short-term leases. In order to cope with demand, the Beijing Tourist Bureau has recruited 1,000 families to provide Olympic accommodation, and many home stay facilities have been available since March. The cost of these “Olympic Family Hotels” will range from ￥350-550 per night, just a fraction of the expected hotel room rates. So, you could always contact them if you’re desperate for a temporary room.

By Tania McCartney