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