Linda Chen, 28, sold her 70 square meter (753 square foot) house in the eastern Chinese city of Hangzhou for a discount of about 300,000 yuan (US$41,963) and in December she and her husband bought the same square foot house. I moved into a rental unit. She has been paying her 9,000 yuan mortgage every month for years.
Despite several mortgage rate cuts introduced by the authorities last year, the couple still had to pay more than 7,000 yuan a month, which prompted their decision to sell.
“It was not an easy decision, but [the house] It was a huge burden,” she said. “I know I have to sell, no matter the price.”
Chen and her husband are among a growing number of people who are looking to rent rather than buy as China’s economy slumps.
Home sales in China continue to decline as Chinese government fails to reverse weak sentiment
Home sales in China continue to decline as Chinese government fails to reverse weak sentiment
“Currently, sentiment has weakened, and some potential homebuyers have decided to extend their leases instead of purchasing a home,” said Xu Yuejing, associate research director at real estate research firm China Index Academy. Some people are,” he said.
Analysts say this trend is also changing the rental housing market. Although overall demand is steadily increasing, there is a disconnect between units at different price points.
According to an analysis by the Kitaike Research Institute, a Chinese real estate think tank, there were approximately 290 million tenants in China as of the end of last year, and the total amount of rental contracts had increased to more than 2 trillion yuan.
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However, the value of the rental housing market is expected to increase by 2% to 1.8 trillion yuan by 2026 from an estimated 1.7 trillion yuan last year, according to China Real Estate Information Corporation (CRIC).
Beike said he expects rental demand to increase this year with households choosing to rent rather than buy as economic growth is expected to slow and record numbers of college graduates flood the market. Ta.
The agency says, “As tenants no longer think of rental properties as mere ‘temporary housing,’ the length of time they live in rental properties has become longer.” “Rather, they think of renting as a kind of long-term ‘settlement.’”
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China Index Academy’s Xu said the rental market is experiencing a “consumption downgrading” phenomenon, which means some tenants prefer properties with lower rents.
According to a semi-annual survey conducted by China Index Academy late last year, 64% of nearly 9,000 respondents across China would consider moving to cheaper rental housing once their rental agreement ends. This indicates that the main reason for this is an expected decrease in income. Xu added.
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“If you look at the performance of 55 cities, rent payments decreased across the board last year.” [tracked by CRIC]” said Li Jianlin, research director of long-term lease division at CRIC. Tenant capacity and willingness to spend has declined across the board, she added.
“Many private landlords, who control the market rather than institutional landlords, find it difficult to get a deal for a while after putting their home up for rent, forcing them to reduce rents and otherwise turn tenants away. You will lose it.”
It is also being squeezed by cheap government-backed rental housing flooding into the market, Lee added.
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58 A report released last month by Anjuke Real Estate Research Institute found that in the 40 cities surveyed by Anjuke, indicators reflecting supply and demand for rental properties rose for mid- and low-priced units, and It decreased in Obi units.
In first-tier cities, the demand and supply of relatively low-priced housing with monthly rents ranging from 501 yuan to 2,000 yuan increased by 2% and 2.1%, respectively. According to Anjuya, the demand and supply of housing with monthly rents ranging from 2,001 yuan to 5,000 yuan decreased by 2.7% and 1.9%, respectively.
“Overall, the market is showing a decline in rents, which reflects weakness in affordability.” [among tenants]” the report said.