Homestay Beijing 2008

International Media - Sunday Times

On July 1, Sunday Times published the article below.

Link to original article.

Going for rental gold

As Beijing gears up for next year’s Olympics, its residents see a winning opportunity

by Flora Bagenal

It is barely a year until the Olympics hit Beijing, and while China's communist government battles with diplomatic sensitivities such as the passage of the Olympic torch through Tibet, the city's residents are obsessed by more capitalist concerns: how much can they let their homes for?

Some 2m tourists – 500,000 of them from overseas – are expected to descend on the city for the Games, which take place from August 8 to 24, but there won't be enough hotel beds to go around. Enterprising residents and investors see the situation as a golden opportunity to make money.

Julian Fisher, 25, a history teacher from London who has been working in the Chinese capital for two years, has already sublet his one-bedroom flat in the city centre to Lee Rindge, 46, an Olympics fan from Texas. They made contact through an internet property forum. "We found each other on www.beijingcommunity.com," says Fisher. "He said hotels were charging up to £400 a day, so I offered my flat for £150 a day for two weeks."

Fisher pays only £200 a month to his Chinese landlady, and subletting is not permitted under his contract. However, he says, the practice is widespread among foreigners in the city. "I don't feel bad about not sharing the money with my landlady because, as a foreigner, I pay twice as much as a Chinese person would."

Fisher, who is throwing in internet access, all bills and the services of his house maid, is not the only person using the web to find western tourists looking for a place to stay. Last month, Piet Bos, a Dutch tour operator who has lived in Beijing for nine years, launched www.homestaybeijing2008.com, which matches tourists to English-speakers willing to let their homes.

For a refundable deposit of £21, would-be landlords can register the property or room they want to rent out on the database. Although, so far, only a handful have done so, Bos, 37, is sure his scheme will take off, as he thinks the Chinese capital's location hinders its ability to cope with the influx of visitors.

"Unlike Barcelona, Sydney, Athens or even London, Beijing has no port or harbour," he says. "So it won’t be possible to use cruise liners to provide added accommodation. The city has no facilities for camping and there aren’t any nearby towns from which people can commute. Beijingers need to realise they can make a serious profit from subletting during the Olympics, but only if they act now."

The average rent in the city is about £100 a month, but flats in complexes built for foreign residents, which have gyms, pools and 24-hour English-speaking security, are often let for £2,500 or more a month. Bos believes that residents who lease or sublet their properties could easily get three times that while the Games are on. "Tailor the package you offer – throw in your house maid, your car and a translator – and you can make even more money."

One of the first to register his home on Bos's site was Mark Moss, 28, an Australian businessman who has lived in Beijing for six years. The two-bedroom flat is in the Lido area, in the northeast, a 10-minute drive from the main stadium. Moss, who lives there with his wife and daughter, is asking for about £130 a day.

"We were in Sydney for the 2000 Olympics," he says. "We could have rented our house, but chose not to. This time, we don't want to miss out."

It is not just expatriates who see the Games as an opportunity to make money. Eileen Wen Mooney, 55, a food critic for Time Out Beijing, has let the two-bedroom city-centre house she owns to an American friend; she will collect £2,500 for two weeks. She says she is fortunate to have international connections, and admits that her Chinese friends would also rent out their homes given the chance. "I can't believe all these people are so desperate to be here," she says. "Personally, I'm going to use the money to go on holiday to Bali."

Such money-making ventures will give quick profits, but what of the longer-term prospects for the market in the Chinese capital? Figures from the Beijing Statistics Bureau reveal that prices for residential property have risen by 42% in the past three years and 9% in the first quarter of this year alone. In April, a Russian property mogul paid £7m for a traditional courtyard house, a record price for a residence in the city.

Although only 1.1% of residential property in Beijing is owned by foreigners, interest in buying is strong and shows no sign of abating, despite the government's efforts to cool the situation. Earlier this year, changes to rules on residential property ownership made it easier and safer for foreigners to buy, but they must still have lived in China for a year before they can do so.

A post-Olympic slump has been predicted, but Nick Jones, the general manager of Knight Frank's Beijing office, believes that foreign interest will not wane. "A combination of low interest rates and expectations of further appreciation of the yuan make China's real-estate sector attractive," he says. "The market shows no serious sign of slowing down in the foreseeable future."

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