China Index Research Institute: Average residential rents in 50 cities rose first in the third quarter and then curbed cumulative changes were relatively stable

The Zhitong Finance App learned that in the third quarter of 2026, the China Index Research Institute published an article stating that in the third quarter of 2026, the overall housing rental market in key domestic cities was running smoothly, the downward pressure on rents was eased, the level of return on rental assets improved, and the industry system framework continued to improve. In terms of rents, under the influence of seasonal effects, residential rents in key cities rose first and then fell slightly in the third quarter, with a cumulative decline of 0.01%. The overall fluctuation was relatively flat; among them, rents in first-tier cities continued to recover, but there was a slight correction in September as demand declined, and the cumulative decline in rents in second-, third- and fourth-tier cities continued to narrow.

The trend of residential rental price index in 50 cities

1. Index trend: Average residential rents in 50 cities rose and then declined in the third quarter. The cumulative change was relatively stable

In the third quarter of 2026, average residential rents in key cities were basically the same as at the end of the second quarter. According to the China Index Research Institute's 50-city residential rental price index, in the third quarter of 2026, the average residential rent in 50 cities fell by 0.01%. The decline was 0.60 percentage points narrower than the same period last year, and the cumulative change in rents was relatively stable. On a monthly basis, in July, due to the continued release of rental demand during the graduation season, the average rent for ordinary housing in key cities rose 0.13% month-on-month, ranking the second highest in the same period in the past five years; in August, as seasonal effects abated, the average residential rent increase in key cities narrowed to 0.03%; in September, the housing rental market gradually entered a low season, and the popularity of rental demand in key cities declined markedly, and rents declined slightly month-on-month. The average rent for residential housing in 50 cities was 33.97 yuan/square meter/month, down 0.17% from the previous month, down 2.23% year on year from August. Narrow 0.22 Percentage points.

Figure: Average residential rent trends in 50 cities from July 2022 to September 2026

Data source: Middle Index Data CREIS

It is worth noting that the year-on-year decline in average residential rents in the 50 cities has continued to narrow since March 2026. As of September, the year-on-year decline had narrowed to the lowest level in nearly 25 months, and there are signs that residential rents are bottoming out and stabilizing in key cities.

2. Urban rents: Residential rents in most cities fell in the third quarter, and there are obvious signs of rent repair in first-tier cities

Judging from the rent level, among the 50 cities, the leading edge of the leading cities was further strengthened, and Shanghai ranked first in the 50 cities for residential rents. Specifically, as of September 2026, rent levels in Shanghai, Shenzhen, and Beijing continued to rank in the top three of the 50 cities, all exceeding 80 yuan/square meter/month; rents in Hangzhou and Guangzhou ranged between 45-50 yuan/m2/month; 8 cities including Sanya and Xiamen had rents between 30-40 yuan/m2/month; 27 cities including Tianjin and Dalian had rents between 20-30 yuan/m2/month; 10 cities including Guiyang and Shijiazhuang had rents below 20 yuan/m2/month.

Table: Residential Rental Price Index for 50 Cities in September 2026 (yuan/square meter/month)

Data source: Middle Index Data CREIS

Judging from the cumulative rise and fall rate in the third quarter, rents fell in 39 of the 50 cities. Specifically, in the third quarter of 2026, residential rents rose cumulatively in 11 cities, including Shanghai and Suzhou. Among them, Shanghai had the biggest cumulative increase of 1.86%, and its month-on-month increase has ranked first among the 50 cities for 6 consecutive months; the cumulative increase in 4 cities, including Suzhou and Shenzhen, was between 0.5%-1.0%, and the cumulative increase in 6 cities, including Kunming and Wuxi, was within 0.5%. In the third quarter, there was a cumulative decline in rents in 39 cities. Among them, Xi'an had the biggest cumulative decline of 1.37%; 5 cities including Sanya and Zhuhai had a cumulative decline of 1.0% (inclusive) -1.3%; 10 cities including Chongqing and Wuhan had a cumulative decline of 0.5% (inclusive) -1.0%; and 23 cities including Beijing and Guangzhou had a cumulative decline of less than 0.5%.

Looking at each echelon, residential rents in first-tier cities continued to recover in the third quarter. According to the 50-city residential rental price index, in the third quarter of 2026, average residential rents in first-tier cities increased by 0.58%, continuing the trend of rent restoration in the second quarter; in September, market demand declined, and first-tier cities ended six months of continuous month-on-month increases, turning into a slight decrease of 0.03%. Average rents in second-tier cities fell 0.34% cumulatively. The decline was 0.22 percentage points narrower than in the second quarter. The cumulative quarterly decline continued to narrow for three quarters. Average rents in the third- and fourth-tier cities fell 0.11% cumulatively. The decline was 0.38 percentage points narrower than in the second quarter and 0.54 percentage points narrower than the same period last year. Overall, rent changes in all tier cities have shown signs of positive development. Among them, the average rent in first-tier cities continues to recover, and the trend of bottoming out is quite clear; although rents in second-tier and third-tier representative cities are still in the adjustment channel, the cumulative decline in the third quarter has all narrowed to low levels in many quarters in recent years.

Figure: The cumulative quarterly rise and fall in residential rents in each tier of cities

Figure: Month-on-month rise and fall in residential rents in each tier of cities

Data source: Middle Index Data CREIS

3. Return on investment: The average rent-to-housing price ratio in 50 cities rose to 2.30%, and the return on housing rental investment continued to improve

In recent years, the housing rental market has been supported by rigid demand, and the decline in rents in key cities has been more moderate compared to housing prices. Against this background, the rent-to-sale ratio in key cities has steadily increased. According to monitoring by the China Index Research Institute, as of September 2026, the average rent-to-housing ratio in the 50 cities was 2.30%, up 0.10 percentage points from September 2025 and 0.32 percentage points higher than the low in early 2023.

Figure: Average rent-to-house price ratio trend in 50 cities from July 2022 to September 2026

Note: Rent-to-price ratio = average urban housing rent in September 2026 × 12 ÷ average price of second-hand housing in the city in September 2026, same as below.

Data source: Middle Index Data CREIS

Looking at each tier, the rent-to-sales ratio in all tier cities has rebounded. Specifically, first-tier cities are affected by the high housing price base, and the return on rent is still relatively low. The rent-to-housing ratio in September 2026 was 1.70%, up 0.23 percentage points from the beginning of 2023; second-tier cities were 2.40%, up 0.33 percentage points from the beginning of 2023; and third- and fourth-tier representative cities were 2.20%, up 0.34 percentage points from early 2023. The rent-sale ratio in key cities has been steadily restored, and the allocation value of rental assets has further increased.

Looking at specific cities, the rent-to-sale ratio in some cities is close to the comprehensive capital cost of buying a home. As of September 2026, the rent-to-housing ratio in 20 cities including Chongqing and Nanchang was 2.4% or above, with rent-to-housing ratios of over 3% in places such as Changsha and Harbin. According to estimates by the China Index Research Institute, the current comprehensive capital cost for Chinese residents to buy a home is about 2.4% to 2.7%. On September 29, the Ministry of Finance, the People's Bank of China, and the General Administration of Financial Supervision jointly issued the “Notice on Implementing the Interest Rate Discount Policy for Residents' Home Purchase Loans”. For households that use commercial personal housing loans to purchase their first home, the construction area of the house does not exceed 120 square meters, and the total housing price does not exceed 1.5 million yuan, the interest rate will be discounted by 1 percentage point on an annualized basis on the loan principal amount. After the implementation of the housing purchase discount policy, the cost of buying a home for residents to buy their first home will continue to decline, and the gap between the cost of buying a home and the ratio of renting and selling a house will narrow further.

Figure: Rent-to-house ratio in 50 key cities in September 2026

Data source: Middle Index Data CREIS

Summary of housing rental policies for the third quarter

In the third quarter of 2026, the central level issued a number of important documents relating to the field of housing rental, clarifying the position of housing leasing in housing consumption and expanding domestic demand, revising provident fund management rules, and improving rental housing credit, REITs financing and guaranteed housing supply mechanisms. At the local level, active measures are mainly focused on raising housing through multiple channels, strengthening market supervision in multiple dimensions, and increasing housing support in various areas to optimize local housing supply and release rental demand.

1. Central policy: iterative upgrading of the top-level housing rental policy system, anchoring domestic demand for housing rental and improving supporting systems

The housing rental market position has risen to become an important vehicle for expanding domestic demand and boosting consumption. On July 2, the State Council approved the “Fifteenth Five-Year Plan to Expand Consumption” and proposed “promoting consumption of bulk durable goods. Better meet housing consumption needs, optimize the supply of affordable housing,... standardize the development of the housing rental market;... steadily promote the renovation of urban villages, dilapidated housing, and old urban neighborhoods”, incorporate housing consumption along with automobiles and household appliances into the “bulk and durable commodity consumption” framework, and clarify the important position of housing leasing in the housing consumption system, and include housing leasing in the overall consumption expansion plan at the national level. At the same time, the “Plan” links housing consumption with the renovation of urban villages, dilapidated housing and old neighborhoods, further opens up policy space for remodeling existing housing for rental housing, and anchors stable policy expectations for medium- to long-term development of the industry.

The housing provident fund management system completed the third systematic revision, further lowering the threshold for withdrawing the Provident Fund for rent. On August 18, the State Council officially issued the “Decision on Amending the 'Regulations on the Administration of Housing Provident Funds'”. This is the third systematic revision of this regulation since it was promulgated in 1999. It mainly focuses on broadening the scope of withdrawal and use, improving the effectiveness of management services, and strengthening risk prevention and control. The revised “Housing Provident Fund Administration Regulations” came into effect on September 20. The new Regulations encourage withdrawing from the Provident Fund to pay rent. In the case of Provident Fund withdrawals, the use of “rent payment” was raised from sixth place in the 2019 edition to the first place; at the same time, the restriction on “rent exceeding the required ratio of household wage income” can only be withdrawn from the Provident Fund, drastically lowering the threshold for renters to use the Provident Fund. In the future, it is expected that all regions will speed up the implementation of supporting rules and optimize local provident fund rental withdrawal policies, and the supporting role of the Provident Fund on the demand side of rental housing is expected to be further unleashed.

Housing rental financing is included in the basic real estate credit system framework, and the threshold for issuing REITs for high-quality rental housing projects is declining. On August 28, the People's Bank of China and the China General Administration of Financial Supervision and Administration issued “Opinions on Reforming and Improving Real Estate Credit Management to Accelerate the Construction of a New Model for Real Estate Development”, establishing a credit support system for housing leasing and other fields, including housing rental development and construction loans, housing rental group loans, housing rental operating loans, etc., and making systematic regulations on the term and amount of various types of loans to promote the upgrading of housing rental credit support from a special support policy to a basic real estate credit system, which helps stabilize medium- and long-term financing expectations of enterprises. On the same day, the China Securities Regulatory Commission issued the “Opinions on Capital Market Support for the Construction of a New Real Estate Development Model”, which clearly promotes the transformation of financing logic from dependent credit to project conditions. Future financing approvals will place more emphasis on project compliance, profitability, and cash flow quality; the “Opinion” also proposed “supporting the issuance of REITs based on eligible projects such as rental housing and urban renewal, or the inclusion of listed REITs as expanded assets. Research and optimize the original shareholder supervision of rental housing and the net cash flow distribution rate requirements for projects to support the construction of a rental housing system”. Under policy guidance, the entry threshold for issuing REITs for rental housing projects is expected to be optimized, and more rental projects will have the possibility of withdrawing from REITs, which in turn pushes enterprises to accelerate the revitalization of existing assets.

Improve the “market+guarantee” supply system, and adhere to the principle of “build as needed, order as needed” to optimize industry supply. On September 18, the State Information Office held a press conference on the high-quality development of housing, urban and rural construction, emphasizing “improving the two systems of security and the market to form a supply pattern with clear positioning, complementary functions, and effectively meeting residents' housing needs”. In housing security work, “it will further improve the housing security system, which mainly focuses on rental guaranteed housing and allocation-type guaranteed housing, adhere to the combination of rental subsidies and physical security, and promote cities above prefectural level and counties that are in a position to do so to improve housing security queuing banks, and scientifically plan the preparation and construction of affordable housing according to waiting needs. Optimizing guarantees “Housing supply” and clarifies the guarantee path for new citizens, young people, and other groups of people “if it is appropriate to allocate rent, allocate rent; if it is appropriate to allocate, then distribute” guarantee path. The policy provides institutional support for the accurate supply of guaranteed housing. Combining rental subsidies with physical guarantees is also conducive to the expansion of rental demand and consolidates the demand foundation for the long-term development of the industry.

Table: Summary of key housing rental policies issued by the central government and various ministries in the third quarter of 2026

Source: Comprehensive compilation by the China Index Research Institute

2. Local policy: focus on revitalizing the stock and optimizing the supply of rental housing, and take more measures to strengthen the guarantee of demand for secure housing

In the third quarter of 2026, local policies were implemented around the three main lines of “multi-channel housing raising, multi-dimensional strong supervision, and multiple measures to support”. Among them, the supply side raised rental properties through multiple channels by purchasing individual second-hand housing and revitalizing existing commercial housing, etc., and simultaneously improving multi-dimensional system construction such as fund supervision and rental management standards; the demand side increased support by increasing rental withdrawing limits, expanding the scope of use of provident funds, providing rent subsidies to key groups, and providing youth post rental services, etc., to reduce the cost of living for new citizens and young people.

Table: Summary of key housing rental policies introduced in various regions in the third quarter of 2026 (incomplete statistics)

Source: Comprehensive compilation by the China Index Research Institute

Supply side: revitalize the stock through multiple channels, optimize the supply of rental housing, and continue to improve industry supervision and land support systems

Raise rental properties through multiple channels according to local conditions to revitalize idle and inefficient stock assets. Chongqing, Henan, Jiangsu and other places encourage the revitalization of existing housing for leasing. Among them, Henan will clearly coordinate the use of tools such as subsidy funds for affordable housing projects, affordable housing reloans, and special bonds; Shanghai, Chengdu, and Hubei support the acquisition of second-hand housing into rental housing, talent housing, etc.; Zhengzhou plans to support the transformation of surplus or long-term vacant public rental housing in District 8 of the central city into guaranteed housing; while the Chongming district of Shanghai uniformly supports the conversion of public rental housing into reserved housing for supply management; Hefei, Jinan, etc. support the construction of inefficient commercial service land and renovation of insured housing; Jiangsu supports colleges and universities to comprehensively adopt “reform and rent” Allocate student dormitory resources through methods such as “, buy, build, and transfer”.

Industry standards and management continue to be strengthened, and the regulatory perspective covers multiple dimensions such as opening reports, capital supervision, guaranteed housing project evaluation, and operation management processes. Among them, Chengdu implements “opening report+capital supervision” two-line closed-loop management for housing rental enterprises, requiring enterprises to set up a single dedicated account for rental supervision, and clearly collect rent for no more than 3 months in principle; Xi'an solicits comments on the operation management evaluation method for guaranteed housing projects, and plans to evaluate the guaranteed housing projects every six months and disclose the results; Tianjin solicits comments on implementation rules for public rental housing management to refine specific rules such as application, rent, contract, and lease renewal.

Furthermore, the implementation of the Shanghai industrial and commercial land renewal policy has provided a more favorable policy environment for commercial rent conversion projects. On July 31, 2026, the Shanghai Municipal Bureau of Planning and Natural Resources issued the “Guiding Opinions on Renewal of Land Use Rights for Industrial and Commercial Projects in Shanghai (Trial)”, making it the second first-tier city to implement a systematic industrial and commercial land renewal policy after Guangzhou. The scope of application of the policy covers all types of non-residential land, establishes the principle of “renewal is the norm, no renewal is the exception, and renewal is required”, and a green channel is set up for projects to be declared for REITs: the renewal period can be determined according to the actual situation of the project, and the renewed land price must not be less than 70% of the base land price. The policy has a combined effect with the commercial building functional compatibility policy introduced in 2025. Among them, the commercial building functional compatibility policy mainly addresses compliance issues during the project renovation phase, while the industrial and commercial land renewal policy provides policy support at the land term level for long-term operation of the project and the exit of REITs.

Demand side: optimize housing withdrawal policies from the Provident Fund and strengthen housing security support for young talents

Support for withdrawing from the Provident Fund for rental housing has been increased, withdrawal limits have been raised in many places, and policy coverage has been broadened. Chengdu, Xi'an and other places are simultaneously abolishing the limit on how many housing consumer withdrawals can be made each year; Wuhan plans to simultaneously remove the limit of rent withdrawals for workers without housing, with single workers withdrawing an unlimited number of times. Among them, single workers can withdraw 18,000 yuan per year, married workers and spouses can withdraw 36,000 yuan, increasing the withdrawal limit for certified talents in Han by 3 times; Changsha expands the coverage of provident fund deposits to include workers in new business formats such as individual businesses, online ride-hailing drivers, couriers, etc., in the scope of deposit, and fully implement direct deposit withdrawals on a monthly basis Rent payment business.

Support for young talents to settle down is being strengthened in various areas, and physical rent allocations and rent subsidies are being strengthened in collaboration. Xiamen upgraded the “50% off rental housing within 5 years” guarantee measure to uniformly relax the age group to those under 35 (inclusive) to meet the transitive housing needs of this group through a combination of physical rent allocation and rent allowances; Shanghai launched the “Newly Employed Youth Housing Service” to provide guaranteed rent allowances for eligible newly employed youth according to a circular schedule; Jiangsu supports increasing the number and number of days of free stays at the Youth Post Station. Young people who have already contracted to enter the workforce can stay with an employment certificate; Guangxi grants housing rental allowances to college graduates within 2 years of graduation, according to the actual payment of the basic subsidy 50% of the 3-month rent approved If you meet the conditions, you can also enjoy the corresponding benefits in addition.

III. Operating performance of public REITs for guaranteed housing

1. REITs operation: Lower-level projects actively optimize operating strategies to ensure high occupancy rates and stable, moderate and positive fund returns

In the second quarter of 2026, the overall average rental rate of the underlying assets of guaranteed housing REITs remained high. According to the latest data disclosed by various bonded housing REITs, as of the end of the second quarter of 2026, the average occupancy rate of each REIT's underlying assets was in a high range of 94% or above: among the 9 single REITs products, the lowest average occupancy rate was 94.1%, the highest was 99.5%, and the median was 95.8%. The underlying assets of Guaranteed Housing REITs are all high-quality rental communities in first-tier and core second-tier cities. Relying on a rigid rental demand base and the pricing advantages of guaranteed housing (public rental housing), the project operation has remained steady. Compared with the same period last year, the occupancy rate of most guaranteed housing REITs was running smoothly, and only two REITs had rental rates fluctuating by more than 1 percentage point. Among them, in the Shengyue Homeland project, which was purchased by Huaxia Beijing Guaranteed Housing REIT, 59 homes were signed in the second quarter and leased in July. Affected by the interseasonal contract and rental period, the project's statistical node occupancy rate dropped to 78.5% at the end of the second quarter, which dragged down the average occupancy rate of Huaxia Beijing Guaranteed Housing REIT to 94.1%, down 1.1 percentage points from the same period last year. Huatai Suzhou Hengtai Rental Housing REIT's elite apartment project increased 1.7 percentage points year-on-year to 97.2% in the second quarter in order to adapt to changes in rental demand and adopted a combination strategy of “accurate coverage+global penetration” to expand the customer base through active leasing. At the end of the second quarter, the project occupancy rate (calculated by rental units) increased 1.7 percentage points year-on-year to 97.2%.

Table: Comparison of rental rates for various guaranteed housing REITs underlying asset projects in different periods

Note: The occupancy rate for the future Rongshang Homeland project of AVIC Beijing Changbao Rental Housing REIT at the end of the third quarter of 2025 is the contract rate data.

Data source: Public information on bonded housing REITs, comprehensive compilation by the China Index Research Institute

The operating performance of public rental housing REITs in the second quarter of 2026 reached a record high. According to the newly disclosed quarterly report data, due to the launch of China Aviation's Beijing Changbao Rental Housing REITs and the expansion of the three REITs, the overall fund revenue, net profit, and amount available for distribution of public guaranteed housing REITs in the second quarter of 2026 all reached new highs.

In terms of fund revenue, the nine public rental housing REITs had a total revenue of 230 million yuan in the second quarter. According to comparable statistics, the revenue of each REITs increased year on year. Among them, Huaxia Beijing Guaranteed Housing REIT, Huaxia Fund China Resources Youchao REIT, and CICC Xiamen Anju REIT were affected by the expansion. Fund revenue increased significantly year over month. The remaining REITs revenue increased within 3% year on year, and mature asset operations were stable.

In terms of net profit, net profit trends of various guaranteed housing REITs diverged in the second quarter. Among the other REITs products, the net profit of three expanded REITs increased significantly. Among other REITs products, Red Earth Innovation Shenzhen Anju REIT and Cathay Pacific Haitong City Investment Kuanting Rented Housing REIT increased slightly from month to month; China Merchants Fund Shekou Rental Housing REIT and Huitianfu Shanghai Real Estate Rental Housing REIT increased year-on-year, declined, and fluctuated greatly.

In terms of the amount available for distribution, the month-on-month changes in various guaranteed housing REITs in the second quarter were dominated by growth. Specifically, with the exception of Red Clay Innovation Shenzhen Anju REIT's allocable amount, which declined slightly year on year, the amount of all other REITs available for distribution increased in the second quarter. Among them, Huaxia Beijing Guaranteed Housing REIT, Huaxia Fund China Resources Youchao REIT, and CICC Xiamen Anju REIT were affected by the expansion, all with year-on-year increases of more than 20%.

Table: Core Financial Index Data for Public Rental Housing REITs

Note: The China Airlines Beijing Changbao Rental Housing REIT fund contract came into effect on April 16, 2026. The financial data statistics period in the table is from April 16 to June 30; in order to ensure comparability, the total month-on-month REITs in the table are calculated based on the first 8 single guaranteed housing REITs data. The total year-on-year calculation is based on the data of the first 7 single guaranteed housing REITs.

Data source: Public information on bonded housing REITs, comprehensive compilation by the China Index Research Institute

In the second quarter of 2026, the annualized cash flow distribution rate of mature guaranteed housing REITs was generally above 3%. Among them, China Merchants Fund Shekou Rental Housing REIT, Cathay Pacific Haitong City Investment Kuanting Rental Housing REIT, Huaxia Fund China Resources Youchao REIT, and Huatai Suzhou Hengtai Rental Housing REIT ground level projects are operating steadily, with annualized cash flow distribution rates between 3.38% and 3.48%; Huitianfu Shanghai Real Estate Rental Housing REIT and Huaxia Beijing Guaranteed Housing REIT annualized cash flow distribution rates are between 3.1% and 3.3%; Red Earth Innovation Shenzhen Anju REIT's annualized cash flow distribution rate is 2.82%, which is basically in line with iTRE infrastructure s Earnings Expectations. CICC Xiamen Anju REIT was affected by the expansion of new assets in May. The distributable amount failed to include full quarterly earnings, and the distributable cash flow was diluted in a short period of time, and the annualized cash flow distribution rate was only 2.43%. In addition, it is worth noting that China Airlines Beijing Changbao Rental Housing REIT, which was first launched in the second quarter, had high data due to the inclusion of transition profit and loss in the current allocable amount, and the annualized cash flow distribution rate was as high as 15.49%. If the corresponding profit and loss were excluded, based on the current allocable amount of 7.56 million yuan, its current cash flow distribution rate was about 3.41%, which is still at a high level.

Figure: Comparison of the second-quarter cash flow distribution rates of various public insurance housing REITs and the 2026 cash flow distribution rate

Data source: Public information on bonded housing REITs, comprehensive compilation by the China Index Research Institute

2. REITs issuance: The launch and expansion process of public rental housing REITs in the third quarter accelerated, and the closed loop of “investment, finance, construction and management withdrawal” accelerated the formation

In terms of initial launch, in the third quarter, China added two new public rental housing REITs products. Among them, Cathay Pacific Haitong China Construction Rental Housing REIT was approved for registration by the Securities Regulatory Commission on August 13, and the fund contract came into effect on September 14; CICC Hangzhou Anju Ningchao REIT received registration approval from the Securities Regulatory Commission on September 4, officially sold on the 22nd, and the fund contract came into effect on the 30th. In addition, the launch process for several other public rental housing REITs is progressing steadily. Among them, Shangshi Rental Housing REIT officially submitted an initial application on September 10 and was accepted by the Shanghai Stock Exchange on September 16; projects such as Zhengzhou Chengfa Anju Public Investment REIT, Jinan Chengfa Rental Housing REIT, and Wuhan Settle Home Rental REIT are also being prepared.

Table: Key developments in public REITs for guaranteed housing in the third quarter of 2026

Source: Comprehensive compilation by the China Index Research Institute

In terms of capital expansion, a number of publicly funded REITs for guaranteed housing have also made positive progress. On September 10, Huitianfu Shanghai Real Estate's rental housing REIT expansion project was recommended by the National Development and Reform Commission. On September 28, product change and expansion applications were officially submitted to the China Securities Regulatory Commission and the Shanghai Stock Exchange, and accepted by the Securities Regulatory Commission and the Shanghai Stock Exchange on September 30. From the time the fund was recommended by the National Development and Reform Commission to completing the application, it only took 18 days, and the pace of progress was relatively fast. The fund's proposed expansion projects are two guaranteed housing projects in the Shanghai Pudong New Area World Expo Area — the Jingyao Project and the Jingbo Project. Both are new rental communities built on rental housing land, and will be put into operation in 2022. In addition, the selection of intermediaries related to the first expansion of Red Earth Innovation Shenzhen Anju REIT has entered the practical stage; China Airlines Beijing Changbao Rental Housing REIT also revealed expansion plans and plans to purchase 4 new guaranteed housing projects in Changping District.

Judging from the underlying assets of the initial launch and expansion of REITs, the issuance of guaranteed housing REITs in leased land to build new guaranteed housing communities has outstanding advantages. In the third quarter, the underlying assets of the two newly established bonded housing REITs were all newly built land for rental housing and mature projects integrated into the guaranteed housing system. In line with the nine previously listed bonded housing REITs, the original equity holders of the fund were all central enterprises or local state-owned enterprises, and the underlying assets were all located in first-tier and core second-tier cities. At the same time, the newly declared Shangshi Rental Housing REIT has the underlying asset of Chengkai Qianjihui Community, which is the first Rr4 land tenancy project in Xuhui District of Shanghai. Huitianfu Shanghai Real Estate Rental Housing REIT, which recently submitted an application for expansion, and the Jingyao Project and Jingbo Project to be purchased are also rental communities built on land for rental housing.

Table: Basic information on Cathay Pacific Haitong China Construction Rental Housing REIT and CICC Hangzhou Anju Ningchao REIT

Source: Fund recruitment brochures, sale announcements, comprehensive compilation by the China Index Research Institute

Currently, with policy support, the closed loop of “investment, finance, construction and management” commercial withdrawal of rental housing in China has basically been completed, and the issuance of public REITs is gradually normalized. As rental communities built with large-scale supply of rental housing land in the early stages enter a steady stage of operation, the pace of launch and expansion of public rental housing REITs is expected to further accelerate.

The scale performance of long-term rental apartment companies

1. Opening scale list: The opening scale of local state-owned enterprises increased by 26,000 units compared to the end of the second quarter, with outstanding incremental advantages

According to statistics from the China Index Research Institute, by the end of the third quarter of 2026, TOP30 centralized long-term rental apartment companies had opened a total of 1.495 million units, an increase of 47,000 units over the end of the second quarter. At the end of the third quarter of 2026, the entry threshold for the TOP30 opening scale was 18063, an increase of 1,013 compared to the end of the second quarter.

In terms of classification, among the top 30 companies that have opened, there are 10 housing rental companies, 12 local state-owned enterprises, 4 entrepreneurial departments, 3 hotel departments, and 1 intermediary department. The number of enterprises in each faction remained the same as at the end of the second quarter. Among them, housing enterprises accounted for 44% of the total operating scale, continuing to maintain a leading position in scale, with an increase of 10,000 units compared to the end of the second quarter; local state-owned enterprises expanded at a steady pace, increasing 26,000 units from the end of the second quarter, accounting for a major share of the increase in the third quarter, and the total share of operations increased to 30% at the end of the third quarter; the entrepreneurship department and the hotel department also increased in scale, with 50,000 and 30,000 units respectively, remaining above 10% at the end of the third quarter.

Table: Statistics on the size of the TOP30 long-term rental companies that opened at the end of the third quarter of 2026

Data source: Middle Index Data CREIS

2. Management scale list: The expansion of local state-owned enterprises drove the number of properties managed by TOP30 long-term rental companies to 2.03 million at the end of the third quarter

According to statistics from the China Index Research Institute, as of the end of the third quarter of 2026, TOP30 centralized long-term rental apartment companies managed a total of about 2.03 million units, an increase of 37,000 units over the end of the second quarter. At the end of the third quarter of 2026, the entry threshold for the top 30 management scale was 25,541, up 1,731 from the end of the second quarter.

In terms of classification, among the top 30 enterprises with management scale, there are 10 housing rental companies, 13 local state-owned enterprises, 3 entrepreneurial departments, 3 hotel departments, and 1 intermediary department, respectively. Compared with the second quarter, the number of local state-owned enterprises increased by 1, and Pioneer Heyuan joined the list. Among the top 30 companies in the management scale list, the housing enterprise department accounted for 45% of the management scale, maintaining a dominant position in the market; the size of the local state-owned enterprise department increased by more than 50,000 units from the end of the second quarter, accounting for 32%; the hotel department accounted for more than 10%, and the management scale increased by 40,000 units compared to the end of the second quarter.

Table: Statistics on the size of the top 30 long-term rental enterprises with management scale at the end of the third quarter of 2026

Data source: Middle Index Data CREIS

Conclusions

In the third quarter of 2026, institution-building in the housing rental industry progressed markedly. The central government issued a number of top-level documents. On the one hand, housing leasing was included in the overall plan to expand consumption, and on the other hand, it completed revisions to the Provident Fund regulations to lower the threshold of the rental withdrawal system; at the same time, housing rental credit was upgraded to a basic real estate credit system, and the capital market further optimized support policies related to REITs, and improved the industry system framework from various dimensions such as demand-side support, supply-side guarantee, credit financing, and asset withdrawal. Based on local reality, local rental housing supply and demand guarantees are consolidated through measures such as revitalizing the stock and expanding rental housing stock, strengthening supervision of industry operations, optimizing the withdrawal of provident funds, and implementing housing allowances for young talents.

At the level of market operation, overall residential rents in key cities across the country showed a steady trend of bottoming out. Average residential rents in the 50 cities fell slightly by 0.01% in the third quarter. The overall fluctuation was relatively stable. Among them, the monthly year-on-year decline had narrowed to the lowest level in nearly 25 months, showing signs that residential rents were bottoming out and stabilizing in key cities. Looking at the city hierarchy, the signs of rent restoration in first-tier cities are clear. The cumulative upward trend continued in the third quarter, and the cumulative decline in average rents in second-tier, third-tier and fourth-tier cities also narrowed. Meanwhile, as of September 2026, the average rent-to-housing price ratio in the 50 cities had risen to 2.30%, and the return on investment in rental assets continued to improve. The rent-to-sale ratio in some cities was already close to the comprehensive capital cost for residents to buy a home.

In terms of guaranteed housing REITs, the rental rate of listed REITs lower-level projects remained high, and the overall revenue, profit, and amount available for distribution in the second quarter; in the third quarter, the pace of public warranty REITs issuance accelerated, two new REITs fund contracts came into effect, multiple initial and expansion projects promoted declarations, and the closed loop of “investment, finance, construction and management withdrawal” of rental housing was further bridged. In terms of the corporate pattern, the scale of TOP30 centralized long-term rental apartment companies has been steadily expanding, and local state-owned enterprises have become the main driving force for housing scale growth this quarter, further increasing their share in the scale of opening and management.

Looking ahead to the fourth quarter, the housing rental market will enter the traditional low season. The pace of release of overall rental demand will slow down, the overall housing supply in the superimposed market will remain high, tenant price sensitivity is high, and there is still some pressure to adjust overall rents. However, after many rounds of adjustments in the early stages, the downward space for rents in key cities has clearly narrowed. It is expected that rents will mainly fluctuate in a narrow range in the fourth quarter; high-quality rental housing in core sectors with industrial agglomeration and mature transportation facilities still has structural support.

Looking at the medium to long term, the role positioning, financing logic, and competitive landscape of the housing rental industry are clearly changing. On the policy side, housing rental support has moved from phased policies to institutionalized arrangements, and certainty about industry development has increased. On the financing side, regulatory orientation pushes the financing logic to shift from subject credit to project credit. Asset quality and cash flow performance have become the core conditions for enterprises to obtain capital and achieve REITs exit. At the level of enterprise competition, as the strength of local state-owned enterprises continues to grow, the focus of market competition is gradually shifting to operational capacity and refined product operation. Subjects with continuous operation capabilities and the ability to refine and adapt to products for new citizens and young people will have a long-term development advantage.