What’s new: The average rental prices in China’s biggest cities have continued to slide as listings increase, reflecting a changing balance between demand and supply amid a broader housing market downturn.
In December, the average rental of China’s first-tier cities — Beijing, Shanghai, Guangdong and Shenzhen — fell by 2.45% from a year ago, according to rental market data provider Zhuge Zhaofang Data Research Center.
The December data extended a cooldown in the rental market of big cities that has been going on since 2022 and marked the sixth consecutive month of year-on-year rental drops.
While prices dropped, properties listed for rental increased by 34.4% year-on-year in December, and were 10.9% higher than the previous month, according to Zhuge Zhaofang.
The context: The December rental drop partly reflects the increasing outflow of people in major cities during the year-end, as migrant workers return home for the holidays, and more people leave for vacation. However, the continued decline indicates broader market shifts due to increasing supply and weakening demand.
Since 2022, the rental market in big cities started cooling as more sellers switched to leasing their properties instead of selling amid a housing market downturn. The government’s acceleration in the construction of subsidized rental housing at the same time increased market supply.
Big cities have become less attractive to young job seekers amid the economic slowdown due to decreasing opportunities and high living costs. In contrast, small and mid-sized cities have seen the rental market warms up due to an influx of people. In December, average rental of third and fourth-tier cities recorded the fourth monthly increase.
Contact reporter Han Wei (weihan@caixin.com)
Get our weekly free Must-Read newsletter.
