The latest cases of Covid-19 are starting to take their toll on Beijing’s rental market, dragging down prices amid the city’s recently tightened control measures. The total market volume in Beijing plunged more than a third in the June 15-21 period compared to a week earlier, according to statistics from Lianjia.com, one of the biggest real estate brokerage companies in China. A real estate agent from Lianjia.com told the Global Times that rents plummeted sharply last week in Beijing, with average prices dropping around 15%, mostly due to recently upgraded coronavirus control measures and a decline in clients. “Compared to the last few weeks, fewer clients are down to visit apartments in person,” said the agent, surnamed Liu, “and some residential compounds are very difficult to get into. A few compounds with tighter controls simply refuse agents entry to give a tour to someone who does not live there.”

Beijing raised its Covid-19 emergency response level from 3 to 2 on June 16, following a new outbreak in the Xinfadi market in the capital’s Fengtai district. Under the new response level, residential compounds are required to have tighter access controls, and access to public venues is also limited. According to Liu, the average monthly rent for a three-bedroom apartment in Beijing’s Chaoyang district has shrunk as much as CNY2,000 from a previous CNY12,000. The rents of two-bedroom flats have been trimmed by around CNY1,000 per month. Graduation season in China begins in June, and will see 8.74 million students leaving university and looking for homes off campus. But this year the market is hurting from the absence of graduates, many of whom are either unable or unwilling to return to the city due to tight travel regulations and a grim job market.

The shortage of incoming job-hunting students spells particular disaster for subleasing platforms like Airbnb, which act as intermediaries between landlords and tenants, and were banking on the seasonal bump. With cash flows squeezed by the sudden shrinkage of potential clients, several rental companies have asked landlords to waive a month’s rent to offset losses incurred during quarantine earlier this year, sparking a wide backlash from both landlords and tenants. “The pressure on the rental market in Beijing is not likely to be lifted in the short term because of grim employment prospects,” Yan Yuejin, Research Director at the Shanghai-based E-house China R&D Institute, told the Global Times.