Many homeowners in Shanghai prefer to rent out rather than sell their properties
June 6, 2017 Category Real estate, Weekly
Home rental prices in Shanghai have slipped 0.3% between January and May, the first downward trend observed in the past 90 months, according to the Shanghai Rental Index Office (SRIO). In non-central districts, some rentals declined more than 3% in the past two months, because homeowners who had hitherto sought to sell their properties, opted to rent them out as it became more difficult to sell. The Shanghai rental market experienced fast price growth in the past seven years. Average rent grew 82% in Shanghai between January 2010 and December 2016, while the corresponding figure was 51% in Beijing, 54% in Shenzhen and 55% in Guangzhou. “Rents grew fast when supplies were declining. When home prices rose quickly, more homeowners tended to sell instead of leasing. Now, the trend is reversing,” Chen Shen, Analyst with China Securities Co wrote in a research note. Savills Research said that in various segments of the Shanghai rental market, occupancy rates have been rising. In the first quarter of 2017, serviced apartments recorded an occupancy rate of 85.1%. The figure for normal apartments was 88%, and 96.6% for villas. During the same period, the average rental for serviced apartments dropped 0.2% to CNY230 per square meter per month. The rent for apartments rose 1% to CNY182.8 per sq m, and 0.2% for villas to CNY154.6 per sq m, the China Daily reports.
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