The average rental in Beijing reached 2,965 yuan ($451) a month in the first half of February, a year-on-year growth of 13.7 percent. Provided to China Daily

BEIJING - The heating system broke down in Jason Klug's apartment a week ago, but the landlord said if Klug wanted heating, he would have to fix it himself.

"This is kind of a repeating thing. We had our hot water break down before," said Klug, 23, a student from the United States. "It seems like a lot of things break in this apartment."

Klug lives in a 120-square-meter apartment in Beijing's Dongcheng district, near the landmark Temple of Heaven, where Chinese emperors prayed to the god of heaven.

"The condition is not that great and it is far from the subway station," he said.

It is a slab-type apartment built in the 1950s. Klug, who is studying Chinese at Tsinghua University, shares the 5,500-yuan ($837) monthly rental with three friends.

"Finding a good apartment in Beijing for a reasonable price is getting harder," Klug said.

Klug is not alone. With the soaring real estate market, more foreigners in China are facing the pressure of renting.

Statistics from the Beijing housing and urban-rural development commission shows that in the first half of February, the average rental in Beijing reached 2,965 yuan ($451) a month, growing by 13.7 percent year-on-year.

Recently the Beijing municipal government unveiled stricter policies by prohibiting people without Beijing household registration or proof of social security contributions or income tax payments in the capital for five consecutive years from buying homes.

The move, many analysts said, will boost rentals in the Chinese capital.

A survey bySoufunHoldings Ltd, a real estate Internet portal in Beijing, showed that 51.1 percent of people who are disqualified to buy a home in Beijing would turn to renting.

Kong Dan, an agent with 5i5j Real Estate Service in Beijing,said the policy, aimed at curbing speculation, would increase the rental demand and push up prices.

"In 2011, rentals in Beijing are expected to grow by 12 percent and would continue to increase in the coming five years," Kong said.

Surging rentals and a sellers' market have put pressure not only on locals, but foreigners, especially students and new employees without a comfortable income.

"Housing presents a dilemma for foreigners now because the housing prices for us are going up and the wages for us are going down," said Klug.

Klug is planning to find a job in China, but he feels that living in big cities in China is now more difficult.

He estimates he would earn 6,000 yuan a month at most at his first job. "If you count in all the cost of living, it would be difficult for me to pay for more than 2,000 yuan per month in rent," he said.

At present, he pays 1,400 yuan a month but if it exceeds 2,000 yuan, he would consider moving, perhaps to a lower quality place.

"It might be less nice or convenient," he said. "The increasing rent did make us less comfortable."

Charles Henderson, 23, a PR professional in Guangzhou, said that in a city, "you'll have to check out what the real estate market there is versus what your income could be".

Henderson, who arrived in Guangzhou in November and lives in the central part of the city, said saving money would be his priority.

"If the rent is between one-third and a half (of my salary), and adding other expenses, my savings from the job would be very minimal," he said.

He said if rents keep going up, he would move from the city center and take the subway to work, or switch to a two-bedroom apartment where he could split the cost with someone.

"It is not difficult but would definitely add some pressure," he said.

On the other hand, the situation for expatriates who stay for a short time in China is better.

Chen Chonglin, a rental adviser with Rentnet Real Estate, which specializes in the expatriates segment, said foreign businessmen who come for periods from one month to two years have fewer problems because their company would pay the rent.

"Their companies would make housing budgets before they come to China and revise it according to market prices," Chen said.

"So these clients have higher requirement for a high quality, 24-hour service and prefer to live in serviced apartments or villas."

But these types of residences are different from local apartments and have almost no correlation with increasing rental prices; instead, prices would be adjusted weekly, based on occupancy rate, she said.

But for some foreigners, with families here and are planning to stay for a few years, increasing rents could be a problem.

"The one thing that makes living in Beijing most expensive is housing," said Bamdad Jabbari, 39, a program manager with a high technology company.

He has been in Beijing for three years with his wife and two children, living near the Sun Park between the third and fourth ring roads.

Jabbari used to live close to the Olympic Stadium where rentals nearby went up 20 percent to 30 percent a year.

He said if his rent shot up, he would probably go beyond the Fourth Ring Road, which would make place him even further from the city center.

"The further you go, the cheaper the price would be," he said. "Around the Sixth Ring Road, the price goes down really fast."

China Daily