China’s high-end rental market struggles post-Covid amid dwindling expats, firms

More than two years after China’s stringent Covid-19 lockdowns triggered an exodus of international businesses and expatriates, the country’s high-end property market continues to suffer from falling rents, with analysts warning the downturn could persist for some time amid declining home prices.

The average rent for flats in Beijing’s central business district, home to more than 118 multinational companies, declined as much as 17 per cent year on year in February to 11,385 yuan (US$1,750) per square metre, according to data compiled by Beike, a real estate services provider owned by KE Holdings.

Rents in neighbouring Dawanglu, as well as those in Jianguomen Wai, an upscale neighbourhood near the diplomatic enclave, both fell 6 per cent. The average rent in the city has dropped by 11 per cent since before the pandemic.

Shanghai fared no better. In Pudong’s Lujiazui, a financial hub known for its luxury high-rises, rents fell 8 per cent, while those near the landmark Jingan Temple tumbled 13 per cent last month. The average rent in the city has fallen 13 per cent compared with pre-pandemic levels.

“The decline in these areas isn’t recent,” said Lu Wenxi, an analyst at Centaline Property, noting that this has been the case since people left in droves following the pandemic lockdown.