Rents in Beijing in November slumped 7.61% from a year earlier, extending October’s 3.4% drop, while the southern boomtown of Guangzhou saw a 1.05% decline, its first since January.

Rents in Chinese cities lowest in nearly two years, shows report

China’s common house rental costs in 40 main cities fell to their lowest final month in almost two years, in line with a personal survey printed late on Tuesday, in an indication of deepening weak spot out there.

Average house rental costs in November stood at 34.71 yuan ($5.30) per sq. metre down from 42.65 yuan in October, in line with knowledge from Zhuge House Hunter.

That’s the bottom since January 2019, the Chinese property knowledge supplier stated.

Rents in Beijing in November slumped 7.61% from a yr earlier, extending October’s 3.4% drop, whereas the southern boomtown of Guangzhou noticed a 1.05% decline, its first since January.

Home rents in main cities have fallen this yr with companies hit exhausting by Covid-19, resulting in wage cuts and lay-offs of recent graduates and white-collar staff.

The decline has additionally hammered huge house rental corporations reminiscent of New York-listed Phoenix Tree Holdings Ltd, often called Danke, which has damaged lease contracts and defaulted on funds.

Rents in so-called first-tier cities fell following defaults on funds by Danke, Yuan Chengjian, vice chairman of Zhuge House Hunter, informed Reuters.

Danke officers weren’t instantly obtainable for remark.

Danke is dealing with a backlash from tenants, landlords and contractors in China’s largest cities together with Beijing and Shanghai, in line with state media studies.

Danke has greater than 110,000 tenants and round 40,000 landlords in Beijing underneath its belt, state-run China Youth Daily reported.

Under Danke’s enterprise mannequin, tenants are inspired to take one-year loans from Danke’s companion financial institution WeBank to pay their rents. Tenants then repay their loans in month-to-month instalments.

Meanwhile, WeBank fingers over the complete proceeds of the loans to Danke, which nevertheless pays its landlords month-to-month, generally.

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