Monthly Rent in Beijing Soars to Skyscraper Heights

Monthly residential rent in Beijing rose a wallet-shrinking 25 percent last year, causing concern for the city's millions of occupants. The data comes from property search engine Zhuge, who released their research report into rental costs earlier this week, finding that July's rental costs were 25.6 percent higher than the same period last year. But that's not the worst of it, with some apartments in the Central Business District seeing rises as high as nearly 40 percent, meaning that a 56-square-meter one-bedroom apartment in CBD now costs RMB 4,960 a month on average, an increase of 37.4 percent compared to a year ago.

Property agencies that control Beijing’s rental market through sublease contracts are partly to blame for the soaring prices, according to The Financial Times. This is not news to locals, who have experienced a constant raising of rent for years on end, with the average monthly rent rising 2.63 percent. According to The Global Times, RMB 91.5 per square meter was the going rate in Beijing as of July, with a 1980s-built 50-square-meter property in Xuanwumen in Xicheng, west of Qianmen, costing RMB 8,000 a month.

Real estate agencies are promising tens of thousands of new rental properties entering the market, and for the current rent levels to be maintained. However, Chinese households tend to prefer ownership over renting, which may put a dent in the real estate agencies' plans to rein in rising rents. Major real estate agency Wo Ai Wo Jia saw their vice-president step down on Monday in controversial circumstances, just days after he admitted that several letting agencies were artificially pushing rents up as they competed to increase their property portfolios. Despite the pledge of 120,000 housing units to be built by property operators in Beijing alone, real estate agencies are increasingly at odds with the public.

As we reported last weekend, the biggest rent hikes in Beijing are in Dongcheng and Shunyi, which have recently seen 10.5 percent and 10.7 percent increases, respectively.

Photos: Chicago Tribune, Reuters, HaroldRoss