Home rents drop by 20 per cent in Shanghai as expats and wealthy mainlanders leave the city due to psychological scar left by a citywide lockdown

Rental charges are falling in Shanghai, with some landlords offering discounts of up to 20 per cent, as expatriate residents and high-income salaried workers rushed for the exit amid lingering zero-Covid controls in China’s commercial hub.

Shanghai’s average monthly home rent fell 5.6 per cent last month to 102.71 yuan (US$14.20) per square metre, from August, according to creprice.cn, a real estate industry data provider. Average charges may fall another 1 per cent to 101.59 yuan, it said, based on the quotations by 52,600 flats available for lease.

“Homeowners are disappointed” with the sagging housing demand, said You Liangzhou, the owner of the Baonuo real estate agency in Shanghai. “High-end homes cannot find tenants unless the landlords agree to cut the rates by at least 20 per cent.”

The decline in the secondary housing market exacerbates the crisis in China’s slumping property market, where sales have slowed to a trickle, stifled by the potent combination of a slowing economy and an ongoing mortgage boycott by borrowers, which have left tens of thousands of unfinished homes standing idle.

A three-bedroom apartment in downtown Shanghai would be available for a monthly rent of about 20,000 yuan in June, when Shanghai authorities lifted a bruising two-month citywide lockdown that had left the city’s economy in tatters.

Four months later today, the same flat could be rented for 15,000 yuan, as vacancies have jumped all across the city of 25 million residents amid an exodus of residents anxious to avoid being caught again by the local authorities’ overt-the-top drive to snuff out all traces of the Covid-19 pandemic.