Terrible....12 months up front makes it impossible for me. :(

It's not impossible to find a decent place in Kunming, it's just harder than it used to be. One has to hunt longer and negotiate harder and be luckier. If you do find something you like, need to act fast; it probably won't be available tomorrow. Dingjin 订金 needs to be a new word in your China vocabulary. (earnest money; deposit)

It's currently a renter's or seller's market.

I mean, payment for 12 months up front makes it impossible for me. I can only pay for 6 months up front, but can sign contract for 1 year or even more if I will like the place and landlord is sane. :)) Should I look for another city? I would like to stay in Kunming... Is it the common practice for all landlords?

Like the previous posters stated, it's gonna be hard. The think the practice is in all of China. My suggestion is putting an AD and state exactly what you want and maybe you will get lucky. You might be at the right time and the right place. Good Luck!

Thank you very much for advice, I will.

One year contract with 6 months payment up front should not be that difficult to find. Real estate agent are almost impossible to avoid if you want your own place, unless you are already in kunming and have an extensive network of chinese friends. If you send me a message with what you are looking for maybe I can give you a helpful tips, a decent estate agent and an area you did not think of but that fit your needs.

JingWei, thank you. I have some friends, but am always glad to have more. There are never too mush friends, right? :))
I will write you private message when I will have some more information about desirable for us location - I am not in China yet. Hope to come to Kunming in the end of September. May be you, guys, have some traditional expats' party going on here? Would be nice...:)