Rental market booming as lifestyles, policies change
China's rental housing market has been growing faster over the past few years with favorable demographics, rising barriers to home ownership, supportive government policies and an influx of capital continuing to boost its development.
By the end of 2020, the total stock of rental housing units operated by the country's 10 largest players totaled around 730,000, compared with 356,000 at the end of 2018, according to a report released on Thursday by global property consultancy JLL, which focuses its study on market-based rental apartments with single-ownership and lease periods upwards of six months.
The majority of those "big brand" rental housing projects are in tier 1 and tier 1.5 cities, with average occupancy between 89 percent and 95 percent at projects operating for six months and longer, JLL said.
"Compared with three years ago, when the market was set to enter a 'lift-off phase' after its 'introductory phase' and through most of its 'growth phase' it now stands at a critical point as it moves toward the final 'mature phase'," said Daniel Yao, head of research at JLL China.
While fresh college graduates and young white-collar workers remain the main tenants, there has been growing demand from other groups including mid-level corporate managers, small private business owners, freelancers and college students, as renting is gaining acceptance among the general public.
Nationwide, Shenzhen led with a total inventory of 133,000 units spanning 395 projects, followed by Shanghai and Beijing, with 71,000 units across 290 projects, and 21,000 units across 121 projects.
In terms of average rents and occupancy, the capital outperformed its two counterparts with rents reaching 189.9 yuan (US$29.4) per square meter per month and occupancy at 97.5 percent.
From the investment perspective, Shanghai remains the most attractive city for investors mainly due to its robust economy, large migrant population and high barriers to home ownership, according to JLL's survey.
The city is trailed by Beijing and Shenzhen while Hangzhou, Guangzhou and Chengdu are also among investors' preferred choices.