Rents in Lujiazui, Xintiandi and Jing’an, three traditional areas for high-end apartments, are seeing cuts of between 10% and 15% compared to a year earlier, according to the latest research by Century 21 China Real Estate.
Yang Lei, manager at a Century 21 branch on Dongchang Road in Pudong, said, ‘While leasing demand jumped by some 30% in Lujiazui area during the post-holiday period, the number of overseas clients we’ve received has declined very rapidly. Most of our tenants are now targeting mid-to-low level houses.’
China View reported that industry insiders said that they’d been expecting rent reductions of up to 15% at some high-end projects along the Huangpu River. That is where a 250-square-meter apartment could fetch RMB50,000 ($7,320) a month a year ago.
On the Puxi side, rents for high-end apartments in Xintiandi and northern Jing’an area have also fallen significantly.
‘Large flats in the area suffered the biggest drops — between 10% and 15% — in rents amid flabby demand from overseas clients,’ said Li Wenlong, a Century 21 branch manager in Jing’an District. ‘For example, a 176-square-meter apartment at One Park Avenue now asks around RMB15,500 a month as compared to RMB18,000 a year earlier.’
Meanwhile, serviced apartments, mainly leased to business executives from multinational corporations, also became less expensive.
The latest research conducted by E-House (China) Holdings Ltd showed that of 77 serviced apartment projects in five districts — Jing’an, Huangpu, Luwan, Changning and Xuhui — 16 had cut their asking price by more than 10%.
Of those offering apartments with a monthly rent of more than RMB30,000, some 23% had cut rents by more than 10%, according to E-House research.
Tighter budgets coupled with fewer expats has led to lackluster demand. Rentals in Lujiazui and Xintiandi area led all decliners in the city in January, down 3.5% and 3.3%, the city’s second-hand home rental index compiler said.