China’s average net asset income per capita in 2024 witnessed a decline to the lowest level in a decade, highlighting the impact of a sluggish real estate industry on the Chinese middle-class families.
According to the data from China’s National Bureau of Statistics, the average net asset income per capita in China in 2024 was 3,435 yuan (RMB), with a year-on-year growth of 2.2%. This represents the lowest annual growth rate since 2014.
Official data shows that since 2019, the growth of net asset income per capita has been continuously decreasing, with the only exception being in 2021 when it grew by 10.2%.
Net asset income includes rental income, interests, and dividends, which are essential components of household income in economically developed regions. Data indicates that net asset income for some residents in major cities has experienced negative growth, reflecting a depreciation of assets for a considerable portion of the middle class.
Taking Beijing as an example, its net asset income per capita has declined for three consecutive years. In 2024, it decreased by 0.6% compared to the previous year, amounting to 12,205 yuan, which is more than a fifth of the average salary in Beijing.
The main reason for the decline in net asset income is the decrease in rental income.
According to data from the China Index Research Institute, in December 2024, the average rent in 50 cities in China decreased by 3.3% year-on-year. In Beijing, the rental price dropped by 5.4%.
In 2024, the real estate industry continued to struggle amidst a severe debt crisis and bankruptcy crisis among major developers. According to the statistics bureau, the sales area of real estate in 2024 decreased by 12.9% compared to the previous year.
Barclays Bank stated in a report released last Friday (February 14) that the Chinese real estate sector is likely to continue to significantly drag down economic growth in 2025.
“We expect real estate sales to decline by 13% in 2024 and then by another 10% in 2025. The worst-case scenario is that we anticipate the adjustment or contraction of the Chinese real estate market to continue until 2030,” the report said.
The downturn in the real estate industry is dragging down Chinese families, as the decline in net asset income is accompanied by weak domestic consumption data. The consumer confidence index sharply dropped from 121.5 in January 2022 to 86.4 in December 2024. An index below 100 indicates low confidence.
Due to the Chinese Communist Party’s delayed opening of the financial market, ordinary Chinese people have been significantly limited in their investment options. In China, the proportion of net asset income to disposable income remains relatively small, averaging 8.5%, while in the United States, this figure is 15.5%.
Apart from real estate, the domestic stock market in China has also been in a prolonged slump, showing only a brief rebound in September 2024 when the authorities introduced stimulus measures, and remaining weak for most of the time.