(Yicai) Sept. 8 -- Rents in China’s four first-tier cities, namely Beijing, Shanghai, Guangzhou and Shenzhen, have increased for six consecutive months since March, with tenants now vying for apartments, when not long ago landlords were cutting rents, according to data from real estate research institutions. Shanghai has led the rise, logging the biggest monthly increase among 50 cities for five straight months.

Recently, several people living and working in Shanghai shared their rental experiences with Yicai and almost all mentioned the same trend, which is that rents are rising. Furthermore, this round of rent hikes has not eased noticeably with the end of the traditional graduation season. In some popular areas of Shanghai, available rental properties have become scarcer, leading to a phenomenon where tenants are competing for places to rent.

“Last year, my landlord cut the monthly rent by CNY200 (USD30),” a lady surnamed Xiao told Yicai. This year, however, her rent has increased to CNY4,800 (USD715) per month from CNY4,400 per month. She currently rents a two-bedroom apartment in the suburbs of Pudong, near a metro station.

Xiao recently asked a property agent to show her some apartments, and many were priced at more than CNY5,500 (USD820) per month. According to the agent, rents in some popular areas of Pudong New Area have risen this year, while the number of available properties on the market has declined.

Last month, another lady surnamed Lin started to consider moving closer to the city center, after her office relocated to central Shanghai. Rents in downtown Huangpu and Jing’an districts were somewhat beyond her budget, so she focused on Putuo district in the northwest of the city, hoping to strike a balance between housing costs and commuting time.

A few days ago, Lin found a one-bedroom apartment with a monthly rent of around CNY5,000. However, before she could even view the property in person, it had already been taken by someone else.

“I’ve been renting in Shanghai for many years, and the rental market is particularly strong this year. I haven’t seen a situation like this for many years,” Lin said.

Uneven Recovery

However, the picture is not uniform across first-tier cities. Shanghai and Shenzhen are leading the current recovery in residential rents.

Average rents for standard residential properties in first-tier cities climbed 0.23 percent in August from the month before, according to data from the China Index Academy. Rents in Shanghai and Shenzhen rose by 0.61 percent and 0.27 percent, respectively, while rents in Beijing and Guangzhou dipped 0.03 percent and 0.07 percent, respectively.

For a long time, expectations of rising property prices in China drove demand for home purchases, which in turn supported housing prices. However, as the real estate market entered a downturn, this cycle was disrupted and the investment appeal of residential properties declined significantly. Nonetheless, the fundamental value of housing as a place to live has remained unchanged.

“High-quality rental properties in core urban industrial clusters and well-connected areas are likely to see greater rental resilience, thanks to their scarcity and stable demand,” said Cheng Wei, head of research at the China Index Academy.

Editor: Kim Taylor