Falling rents in China a sign of economic uncertainty

Demand is down in major cities where recent college grads typically drive the market

New York Weekend Edition /
Jul.July 25, 2020 12:00 PM
Beijing

Beijing

Rents are falling in some of China’s biggest cities amid a decrease in demand for apartments.

The overall economic slowing brought on by the global coronavirus pandemic as well as China’s ongoing trade war with the United States are both impacting the apartment market in China, according to the Wall Street Journal.

Average rents across China’s midsize to large cities fell more than 2 percent last month year-over year, according to an analysis by real estate data tracker Beijing Zhuge House Hunter Information Technology Co. June marks the third-straight month of year-over-year declines.

The state-backed Chinese Academy of Social Sciences found Beijing rents fell 1.4 percent from May to June. Rents in Shenzhen fell 3.2 percent over that period.

While there’s shrinking demand for rentals, there continues to be feverish demand for property among homebuyers. More money was invested in Chinese homes last month than any other month on record. There are concerns that the performance in the housing market is indicative of a bubble.

Falling rents have coincided with growing joblessness in China. The summer is usually a strong season for renting because of demand from recent college grads, but unemployment among that demographic hit a record last month of 19.3 percent.

“The epidemic stopped a lot of college graduates from coming to the big cities, and some tenants in big cities went back to their hometowns because of the high living costs and reduced opportunities,” said Huang Hui, senior analyst at SoftBank-backed online rental platform Beike Zhaofang. [WSJ] — Dennis Lynch 


Related Articles

arrow_forward_ios
Chinese President Xi Jinping (Getty)
China bans government elites from holding overseas real estate assets
China bans government elites from holding overseas real estate assets
A photo illustration of a crystal ball predicting future home prices (iStock)
Home sales, building to slow: Fannie Mae
Home sales, building to slow: Fannie Mae
Zillow economist Nicole Bichaud (Zillow, iStock)
Where have home values grown more, suburbs or cities? The answer may surprise you
Where have home values grown more, suburbs or cities? The answer may surprise you
Vanke US managing director Kai-yan Lee, RFR’s Aby Rosen and 100 East 53rd Street (Vanke US, Getty, M18 Public Relations)
With Aby Rosen out, Chinese developer slashes Midtown condo prices
With Aby Rosen out, Chinese developer slashes Midtown condo prices
80 South Street and Oceanwide Holding's Lu Zhiqiang (ATCHAIN, Getty)
Oceanwide loses control of Manhattan supertall site
Oceanwide loses control of Manhattan supertall site
Parkview’s Paul Rahimian and 1800 Avenue at Port Imperial (Parkview Financial, Handel Architects, Illustration by Kevin Cifuentes for The Real Deal)
Chinese developer Hongkun faces foreclosure on luxury NJ condo
Chinese developer Hongkun faces foreclosure on luxury NJ condo
Where have all the sellers gone?
Where have all the sellers gone?
Where have all the sellers gone?
Eric Wu, CEO and co-founder, Opendoor (Opendoor, iStock)
Opendoor stock soars on first profitable quarter
Opendoor stock soars on first profitable quarter
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...