Amid the continued sluggish Chinese economy, in 2024, not only could house prices not hold up, data shows that rental prices in several cities, including Beijing, Shanghai, and Shenzhen, have also fallen back to levels from ten years ago.
According to Chinese financial new media “Intelligent Valley Trends,” citing data from the big data platform Wind, last year rental prices in Beijing, Shanghai, and Shenzhen fell back to levels between 2015 and 2017, Guangzhou fell to 2014, Chengdu fell back to 2018, and Tianjin even regressed to 2010. In addition, rents have continued to decline this year, while the average time properties are listed for rent has significantly lengthened.
According to data from the housing market institution “58 Anjuke Research Institute,” in January, the average listed rental prices in 40 cities across the country fell by 1.2% compared to the previous month; the average listing period for rental properties in 40 cities across the country reached 51.9 days, an increase of 6.9 days from the previous month.
Analysis in the article suggests that one of the reasons for the decline in rental prices is the economic downturn and reduced expectations of income among the public. According to the Chinese mainland’s “Economic Observer” report, last year, 15 provinces announced negative growth rates in net property income, with 5 provinces and cities, including Beijing and Jiangsu, seeing negative growth rates. Moreover, property net income in Beijing has been in negative growth for the past three years.
The article indicates that the decline in rental prices is a good thing for young people, but in times of economic turmoil, many young people are also showing a trend of “downsizing” their living spaces.
A survey by the housing market institution Zhongshiyanyan Research Institute shows that 60% of the surveyed tenants plan to move after their lease expires, with the top three reasons being: wanting to move to a cheaper property due to the fall in market rents, job changes, and reduced income expectations.
The article concludes by pointing out that the decline in rents has opened up more possibilities for young people, but for asset values, it signals the end of an era of extensive growth.