In the first half of 2025, compared to the first half of 2024, residential rents in 32 out of 35 major first- and second-tier cities in China have dropped, with only 3 cities experiencing a slight increase. This trend signals an overall “comprehensive price reduction” in the Chinese housing rental market.
According to the standards of the National Bureau of Statistics of the Communist Party of China, there are four first-tier cities: Beijing, Shanghai, Guangzhou, Shenzhen; and 31 second-tier cities including Tianjin, Shijiazhuang, Taiyuan, Hohhot, Shenyang, Dalian, Changchun, Harbin, Nanjing, Hangzhou, Ningbo, Hefei, Fuzhou, Xiamen, Nanchang, Jinan, Qingdao, Zhengzhou, Wuhan, Changsha, Nanning, Haikou, Chongqing, Chengdu, Guiyang, Kunming, Xi’an, Lanzhou, Xining, Yinchuan, Urumqi. In total, there are 35 first- and second-tier cities.
Recently, the “Financial Week” cited official data to summarize the changes in rents in the first half of 2025 in these 35 cities.
Among the 35 cities, 27 cities saw rent decreases of more than 2%, with 10 cities experiencing drops of over 5%, including Xi’an, Changsha, Xining, Zhengzhou, Beijing, Wuhan, Fuzhou, Nanjing, Shanghai, and Hangzhou. Only three cities saw increases: Urumqi by 2.3%, Tianjin by 0.9%, and Harbin by 0.7%.
The city with the largest rent decrease was Hangzhou, followed closely by Shanghai. In terms of month-on-month changes, 24 cities experienced rent declines, with 8 cities showing decreases of over 2%. Conversely, 11 cities saw rent increases, with 3 cities having increases of over 2%.
In the first half of 2025, the month-on-month changes in residential rents in these 35 cities ranged from -4.2% to 3.6%, while the year-on-year changes ranged from -10% to 2.3%. Compared to historical peaks, the rent changes ranged from -26.4% to -1.1%, indicating a significant drop in current rents.
Factors affecting residential rent fluctuations include urban residents’ disposable income. Among the 35 cities, 14 cities had urban residents’ disposable income exceeding 60,000 yuan in 2024. Among these cities, 10 had rent declines of less than 10%.
However, despite Shanghai having the highest urban residents’ disposable income nationally, its rent decreased by 8.1%, ranking second nationwide. This discrepancy raises questions about the unique market pressures Shanghai faces during the current economic downturn.
The average rent in Hangzhou dropped by 10% from 69.5 yuan per square meter to 62.5 yuan per square meter, marking the largest decrease in this data.
Considering recent events like the foul water incident in Yuhang District causing public panic and dissatisfaction, analysts suggest that such public service crises could further diminish residents’ confidence and even prompt some to consider “escaping” Hangzhou.
In addition to the residential rental market, office rents in first- and second-tier cities in China are also experiencing a widespread decline.
Among the 35 cities, office rent in 12 cities has dropped by more than 5% month-on-month, with Beijing (-12.7%), Nanning (-9.7%), and Shanghai (-9.6%) experiencing the largest declines.
Compared to the same period last year, office rents in 34 out of 35 cities have decreased, with only Shenyang seeing a minimal increase of 0.1%. Particularly, Beijing and Shanghai witnessed significant double-digit declines of 17.3% and 17.8%, respectively, among the top five cities with the highest rents.
The “China Times” reported that in the first half of 2025, the office market in Shanghai exhibited severe signs of insufficient new demand and a continuous rise in vacancy rates. Reports from real estate consulting firm Savills indicate a 30.2 million square meter increase in new office supply in Shanghai, with a 0.3% rise in overall vacancy rate to 22.4%, highlighting the increasingly prominent issue of oversupply.
Despite ranking fourth globally in total GDP in 2021, Shanghai has lost its former prosperity due to factors like three years of pandemic restrictions and overall economic downturn in China, reflected in the sluggish office market.
Huang Zhen, Director of the Commercial Real Estate Department at Colliers International Shanghai, stated on July 10 that since the second quarter of this year, “tenants have continued to be highly sensitive to rental costs and actively sought more favorable lease terms.”
Some Shanghai netizens commented that tenants feel their previous rents were high and are now trying to negotiate lower rents with landlords, even breaking lease contracts unilaterally, as the market is on a downward trend.