China Index Research Institute: Overall rent fluctuations in key cities were slightly adjusted in the first half of the year, and the average residential rent in 50 cities fell by 1.37% cumulatively

The Zhitong Finance App learned that on July 4, the China Index Research Institute released the summary and outlook of China's housing rental market for the first half of 2025. In the first half of 2025, overall rents in key cities fluctuated slightly, and the average residential rent in 50 cities fell by 1.37% cumulatively. Among them, the performance of first-tier cities was relatively steady.

(1) Residential rents in 50 cities: The trend of slight rent adjustments in key cities continues in the short term, and the performance of first-tier cities is relatively steady

Overall rent: Residential rents in 50 cities fell 1.37% cumulatively in the first half of the year. Rents stabilized in the short term in February and declined since March

Average residential rents in key cities declined slightly in the first half of 2025. According to the 50-city residential rental price index, in the first half of 2025, average residential rents in the 50 key cities fell by a cumulative total of 1.37%, an increase of 0.47 percentage points over the same period last year. Among them, the average residential rent in the 50 cities of June was 35.0 yuan/square meter/month, down 0.27% month-on-month and 3.71% year-on-year.

Judging from monthly trends, the industry still shows obvious seasonal effects. Judging from the operating situation in the first half of the year, rents in key cities showed brief signs of stabilization during the “return to city season” (February) after the Spring Festival. The rent decline expanded in April and May. Driven by the mid-year college graduation season in June, demand for housing rental in key cities increased, and the rent decline narrowed.

City rents: The decline in rents in first-tier cities is relatively small

Looking at the hierarchy, according to the 50 city residential rental price index, in the first half of 2025, the average residential rent in first-tier cities fell by 0.56%, the smallest decline. The average rent in second-tier cities fell by 1.83%, and the average rent in third- and fourth-tier cities decreased by 1.47%.

Rental income ratio: The rental income ratio in the 50 cities continues to slowly decline

As of June 2025, the average rental income ratio in the 50 cities was 16.4%. With the rent correction, the rental income ratio slowly declined, down about 1.4 percentage points from June 2024 (17.8%). Looking at specific cities, the rent income ratio of all 50 key cities declined compared to the same period last year. Among them, hot cities such as Beijing, Shenzhen, Hangzhou, Sanya, and Fuzhou saw significant declines.

(2) Return on investment: The rent-to-housing ratio in key cities continues to rise slightly, and rental returns from high-quality assets have improved

In the first half of 2025, the rent-to-housing ratio in key cities continued to rise. As of June 2025, the ratio of residential rent-to-housing prices in the 50 key cities was 2.17%, up 0.08 percentage points from the same period last year (2.09%). Looking at specific cities, of the 50 cities, rent and housing prices in only 6 cities, including Hangzhou and Sanya, declined slightly compared to the same period last year, while the ratio of rent to housing in the remaining 44 cities all increased. Among them, Harbin, Changzhou, and Dongguan increased significantly.

The return on housing rental investment in key cities continues to improve, and the attractiveness of housing rental investment has increased. In the first half of 2025, housing prices in key cities continued to adjust, while the housing rental market benefited from the rigidity of industry demand, the degree of standardization and rental quality continued to improve, the average rent adjustment was moderated, and the return on investment of high-quality assets continued to improve. According to monitoring by the Central Index Institute, as of June 2025, the average rent price in the 50 key cities had increased by 0.19 percentage points compared to the low in early 2023.

(1) Guaranteed housing raising: Many places are close to completing the “14th Five-Year Plan” fund-raising targets, and the pace of subsequent fund-raising may slow down

Judging from the scale of guaranteed housing raised, during the “14th Five-Year Plan” period, the national plan was to raise 8.7 million units (units) of guaranteed housing, and by the end of 2023, 5.73 million units (units) had been raised, with a completion rate of 66%; the 2024 statistical bulletin issued by the Bureau of Statistics stated that “construction of affordable housing, affordable rental housing, and public rental housing for sale began and 1.8 million units (units) were raised throughout the year.” Overall, guaranteed housing has reached a certain scale in various regions, and the housing problems of a large number of new citizens, young people, and migrant workers have been solved. It is expected that during the “15th Five-Year Plan” period, more guaranteed housing will be raised according to the “order as needed, as needed” model, through a combination of stock transformation and new construction.

By the end of 2024, Jiangsu Province and Anhui Province had completed the “14th Five-Year Plan” guaranteed housing raising targets ahead of schedule, and Zhejiang, Beijing, Shanghai and other places had completed more than 90% of the fundraising tasks. However, progress in Guizhou Province and Chongqing is relatively slow. The scale of fund-raising has not reached 80% of the “14th Five-Year Plan”, and there is still some room for 2025.

As guaranteed housing financing progresses rapidly in the early “14th Five-Year Plan” period, the pace of raising housing may slow down in 2025. According to the comparison between each region's 2025 and 2024 guaranteed housing raising targets, most regions have reduced their annual task targets. For example, Jiangsu Province and Zhejiang Province reduced the number of units raised by 112,000 units and 60,000 units, respectively. For first-tier cities and some provinces and cities with low early construction completion rates, the guaranteed housing raising targets have remained on a certain scale. Among them, Guangzhou and Shanghai raised their targets in line with the previous year, while Hainan and Qinghai provinces raised their targets from the previous year.

(2) Guaranteed housing REITs: The underlying assets are operating steadily, and the REITs issuance and expansion process is speeding up

Project operation: The overall rental rate remains relatively high, but there are differences between projects

According to the latest report for the first quarter of 2025 disclosed by various guaranteed housing REITs, as of the end of March 2025, the occupancy rate of the 14 underlying asset projects of the six bonded housing REITs was generally above 90%, maintaining a high level of operation. Specifically, the underlying assets of CICC Xiamen Anju REIT continued to be basically fully leased. The average occupancy rate of the underlying assets of Cathay Pacific Junan City Investment Insurance REIT declined slightly compared to the end of 2024, and the average occupancy rate of the underlying assets of the remaining four bonded housing REITs all rebounded. Among them, Huaxia Fund's Huarun Youchao REIT had an average occupancy rate of nearly two years, while China Merchants Fund's Shekou Rental Housing REIT project gradually escaped the impact of corporate tenants' collective rents at the end of last year. The rental rate increased by 20.4 percentage points compared to the end of last year. Overall, against the backdrop of increased competition in the long-term rental market in key cities in the short term, the underlying assets of bonded housing REITs have shown strong cyclical resilience in the context of current market fluctuations with location advantages, high quality, and specialized operating capabilities.

Fund income: Overall, bonded housing REITs earnings declined slightly in the first quarter, and CICC Xiamen Anju REIT performed well

The overall revenue of bonded housing public REITs declined slightly in the first quarter. According to the latest disclosed data, according to a comparable scale, the overall revenue, net profit, and distributable amount of guaranteed housing REITs in the first quarter of 2025 generally declined slightly compared to the same period last month, but the decline was within 6%.

In terms of fund revenue, guaranteed housing REITs revenue in the first quarter all declined slightly from month to month. Among them, Huaxia Beijing Guaranteed Housing REIT, Red Clay Innovation Shenzhen Anju REIT, and CICC Xiamen Anju REIT achieved slight month-on-month growth. In terms of net profit, overall bonded housing REITs fluctuated slightly from month to month in the first quarter. Among them, the net profit of CICC Xiamen Anju REIT and Huaxia Fund China Resources Youchao REIT all increased significantly from month to month, while the net profit of the remaining four bonded housing REITs all declined to a certain extent from month to month. In terms of the amount available for distribution, the overall amount of guaranteed housing REITs decreased slightly from month to month in the first quarter. Among them, the amount available for distribution of CICC Xiamen Anju REIT increased slightly from month to month, the amount of guaranteed housing REITs in Huaxia and Beijing was relatively stable, and the amount of allocable amount of the rest of the guaranteed housing REITs declined.

REITs issuance: The issuance speed of guaranteed housing REITs has accelerated markedly, and both the launch and expansion of REITs progressed significantly in the first half of the year

In 2025, the central government and various ministries and departments repeatedly stated their support for the expansion and expansion of the infrastructure REITs market, and the issuance of public mortgage REITs accelerated markedly. In the first half of the year, two bonded housing REITs were officially launched and launched. China's bonded housing public REITs expanded to 8, with an initial scale of nearly 12 billion yuan, accounting for 7.0% of the total public equity REITs, an increase of 1.1 percentage points over the end of 2024. At the same time, the public mortgage REITs expansion process is also progressing at an accelerated pace. In June, the Huaxia Beijing Guaranteed Housing REITs expansion and sale was officially completed