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
Knock CFO Michelle DeBella and CEO Sean Black (Photos via Knock; PR Newswire)

Knock hires ex-Lyft, Uber exec as first CFO

Knock hires ex-Lyft, Uber exec as first CFO
Mortgage applications reach pandemic peak

Mortgage applications reach pandemic peak

Mortgage applications reach pandemic peak
High demand and low supply has driven house prices up (iStock)

Investors building single-family rentals to meet demand

Investors building single-family rentals to meet demand
Housing supply is tighter than ever. (Getty)

Active home listings hit record low

Active home listings hit record low
(Getty)

Mortgage applications fall during holidays even as rates sink

Mortgage applications fall during holidays even as rates sink
(iStock)

China limits property loans to curb housing bubble

China limits property loans to curb housing bubble
 U.S. pending home sales declined for the third consecutive month. (iStock)

Pending home sales decline for third straight month

Pending home sales decline for third straight month
(iStock)

Home prices hit fastest growth in six years

Home prices hit fastest growth in six years
arrow_forward_ios

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

Loading...