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China’s home rental market primed for growth as high interest rates, stuttering economy shift demand from buying to leasing: JLL report
- The multifamily property segment – typically buildings owned by institutional investors and leased out as flats – is tipped to escape China’s property crisis
- With Shanghai in particular gaining steam in the sector and other cities likely to follow, ‘the country is primed to become a leading multifamily market in Asia-Pacific,’ says JLL
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The multifamily property segment – typically buildings or blocks of buildings owned by institutional investors and leased out as flats – is tipped to escape a property rout in mainland China as supply and demand increase, particularly in Shanghai, according to JLL.
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Beyond China, the wider Asia-Pacific region and even the US multifamily segments are primed for growth given the elevated interest rate environment, which has shifted demand from home purchases to rentals, other analysts said.
Shanghai, the mainland’s financial hub, will see its supply of new multifamily units nearly triple to 210,000 over the next two-and-a-half years, according to property consultancy JLL.
Demand is keeping up with supply in the city, with overall occupancy at about 90 per cent currently, JLL said in a report this month.
The multifamily market penetration rate in Shanghai – its share of the entire rental sector – is tipped to surge to 15 per cent by 2030 from 5 per cent this year, the report said. Rents are likely to grow in a range of between 3 per cent and 5 per cent.
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Anger mounts as China's property debt crisis leaves flats unfinished
Anger mounts as China's property debt crisis leaves flats unfinished
Shanghai is likely to receive as much as 9 billion yuan (US$1.25 billion) of investment in the multifamily sector this year, said Robert Anderson, director, head of living, Asia-Pacific capital markets at JLL, in an interview.
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