The latest data from the Chinese real estate market indicates that the average residential rent has once again increased, mainly due to the rising demand for rental housing among college graduates. Analysts suggest that the expanding population of graduates, coupled with the impact of Artificial Intelligence (AI), may lead to a potential increase in the youth unemployment rate in China.
According to a report released by the China Index Research Institute website on August 10, in July of this year, the average residential rent in the key 50 cities reached 34.01 yuan per square meter per month, with a month-on-month increase of 0.13%. This increase is relatively high compared to previous years, slightly lower than the level in July 2023.
Among the 50 cities surveyed, the number of cities where rent has increased has grown by 8 compared to June, with cities like Shanghai, Beijing, Shenzhen, Hangzhou, and Suzhou continuing to see rent increases. The average rent for ordinary residential properties in first-tier cities increased by 0.38% month-on-month, while second-tier cities saw a slight decrease of 0.01%. Third and fourth-tier representative cities also ended a 24-month decline and saw an increase of 0.02%.
A press release from the China Index Research Institute states, “July is a month when rental demand is concentrated as graduates enter the market, leading to increased activity in the rental market in key cities.”
Data released by the Ministry of Education of the Communist Party of China shows that the total number of ordinary college graduates in 2026 is expected to reach 12.7 million, an increase of 480,000 compared to the previous year, reaching a historical high. Industry analysis suggests that millions of college graduates choose to enter first-tier cities for employment or internships each year, leading to a significant increase in rental demand, thereby directly driving up rents in core areas and surrounding regions.
Looking ahead, the China Index Research Institute believes that in cities like Beijing, Shanghai, Shenzhen, and Tianjin, driven by the graduation season and family rental demand, rental prices will continue to rise. Most second-tier and third-fourth-tier cities may still face pressure for rental adjustments, but the downward trend has significantly narrowed.
Additionally, the sustained increase in residential rents is adding pressure to Chinese college graduates.
According to data from creprice.cn in 2026, shared rental data in major cities show that in Beijing’s Haidian, Chaoyang, and Xicheng districts, single-room rents range from 3000–4500 yuan per month, while along the outskirt subway lines it can drop to 1800–3500 yuan. In Shanghai, the rents in districts like Huangpu, Jing’an, and Xuhui range from 3500–5200 yuan per month, while in outer ring or near suburbs it ranges from 2700–4000 yuan.
The latest edition of the “Human Resources White Paper” released by the mainland human resources service provider “Zhaopin” shows that the median monthly salary for fresh graduates is 7681 yuan in Shanghai and 7576 yuan in Beijing.
Apart from the pressure of residential rents, with the largest number of college graduates in history about to enter the labor market, combined with the accelerated displacement of entry-level positions by Artificial Intelligence (AI), the youth unemployment rate in China is expected to rise.
According to Bloomberg, ANZ Bank economist Xing Zhaopeng predicts that with the intensification of labor oversupply, the youth unemployment rate may approach 20% in August and September. “Due to cyclical and structural challenges, employment pressure continues to increase.”
An article by BBC Chinese on August 3 also indicates that as the largest group of graduates in history leaves campus, they are not entering an expanding job market. Major Chinese companies are currently undergoing massive layoffs, let alone hiring interns, reflecting the severe employment situation faced by young people in China.
Citigroup predicts that the widespread adoption of AI is causing workplace disruptions and may ultimately threaten around 70 million jobs in China.