The decline in China’s rental housing market has begun to slow, with overall rents still below last year’s levels in the first half of the year, although major cities like Beijing, Shanghai, and Shenzhen are experiencing growth again.
In the first six months, the average rent across 50 key cities decreased by nearly 0.6%, compared to a drop of over 0.8% during the same period last year, according to industry data. As of last month, the average rent was approximately 33.97 CNY (around 5 USD) per square meter, representing a 2.8% decrease from the same period last year, but a slight 0.1% increase compared to May.
Eight cities out of the fifty experienced cumulative rent increases during this period, a significant improvement from just one city a year ago, signaling a clear trend toward market recovery. Among the 42 cities with decreasing rents, 15 saw declines of less than 1%, 20 experienced declines between 1% and 2%, and seven cities faced drops exceeding 2%.
Throughout the first half of the year, rent prices in major cities generally continued to slightly decline, but the scope for further decreases appears to be diminishing following several years of steady price corrections. Strong underlying demand, along with government-assisted affordable rentals for lower-income groups, has contributed to reducing price volatility, leading to more stable rental prices across various regional markets.
The most noticeable signs of recovery have appeared in top-tier cities. Their average rent increased by 0.6% over the six months, ending a two-year downward trend. In particular, Beijing, Shanghai, and Shenzhen each saw gains for four consecutive months, highlighting the strength of the rebound. Meanwhile, Guangzhou was the only leading city to experience a slight decline in rents during this period, with the decrease staying below 1%.
In contrast, rental markets in lower-tier cities continued to face pressure. Second-tier city rents fell by about 1.2% over the same period, while those in third- and fourth-tier cities declined by approximately 0.8%.
Industry experts note that the rental market is entering a new phase focused on improving service quality, operational efficiency, and regulatory compliance. Recent measures by government authorities are aimed at easing housing costs for key groups, including new urban residents and young professionals.