China's Rental Market Shows Stabilization Amid Seasonal Fluctuations and Government Interventions

The Chinese rental market has seen a stabilization throughout the year of 2023, with price fluctuations mostly aligned with traditional seasonal trs, according to data from the National Bureau of Statistics. The average rent across China experienced a marginal decrease of 0.1 each month.

In China's first-tier cities like Beijing, Shangh, Guangzhou and Shenzhen, as well as its southern province of Guangdong including Shenzhen, there were little fluctuations in the rental market; second-tier cities showed slight variations while third- and fourth-tier cities experienced sharper decreases according to the data.

A report by the CREIS China Real Estate Index System highlighted that rents increased year-on-year in 19 out of 50 major cities surveyed throughout 2023. For example, Sanya on Hnan island saw a rise over 3 and Changsha saw prices increase more than this rate while prices in Wenzhou in Zhejiang province, Xuzhou in Jiangsu province, and Zhengzhou in Henan province fell by over 5.

Stabilizing Prices: In Shanghan economic hubthe rental market remned relatively steady throughout the year. Seasonal trs were mnly seen rather than dramatic changes, although there was an unseasonable rise in November and December of last year.

The average price for a rental property stood at 84.1 yuan $12 per square meter by mid-November, a growth of 1.69 compared to August according to the CREIS data. Districts like Qingpu and Jinshan experienced decline in prices at around 1.39 and 1.84 respectively year-on-year from November. Meanwhile some downtown districts like Jing'an saw a monthly increase by 0.37, while Xuhui witnessed an annual growth of 0.81.

Factors Impacting the Market: The pressure on tenants' affordability has influenced China's rental market, with about 40 planning to move citing income expectations as motivation for finding cheaper accommodation according to a survey conducted by Beijing's China Index Academy.

Another factor impacting local markets is an increase in government-subsidized housing supply which has helped stabilize prices of private rental properties.

In 2023, the Ministry of Housing and Urban-Rural Development pledged to build or acquire over three million affordable rental homes through construction or from private developers including public housing and shared ownership homes.

The completion rate for these subsidized housing units stands at 72 as of third quarter of this year, according to ministry figures. The total number of such units was recorded at around 5.65 million by the start of this year.

First-tier cities med to construct or acquire over 70 thousand units in 2023 while second- and third-tier cities implemented their own plans based on local demand and conditions.

The impact of lower income expectations and increased subsidized housing is expected to ease as China's economy recovers.

This piece was originally published by the Shangh Observer, a platform for Shangh Data operated by the same entity. It has been translated into English with minor edits for clarity, adapted from its original Chinese version, and republished under an agreement.

Translators: Chen Yue and Xue Ni; editors: Xue Ni, Luo Yahan, Hao Qibao.

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