The China Index Academy reported that in August 2026, the pace of housing rental demand release moderated, with the month-on-month increase in average residential rents across 50 cities narrowing. According to the China Index Academy's 50-city residential rental price index, the average residential rent in these cities stood at 34.02 yuan per square meter per month, marking a 0.03% month-on-month uptick—a deceleration of 0.10 percentage points compared with July. On an annual basis, rents dropped 2.45%, with the decline narrowing by 0.17 percentage points from the prior month.
Overall market performance
In August, 15 cities recorded month-on-month rent increases, down by nine from July. Shanghai led with the largest gain of 0.61%, while Urumqi and Dongguan posted increases ranging between 0.3% and 0.5%. Five cities, including Suzhou and Shenzhen, saw gains of 0.1% to 0.3%, and seven cities such as Yinchuan and Hangzhou registered increases within 0.1%. Nanning's average residential rent remained flat month-on-month. Conversely, 34 cities experienced rent declines, up by nine from July. Xi'an registered the steepest fall of 0.43%, followed by Nanchang and Chongqing with declines of 0.3% to 0.4%. Seventeen cities, including Wenzhou and Nantong, saw drops between 0.1% and 0.3%, while 14 cities such as Lanzhou and Guangzhou recorded declines within 0.1%.
Corporate dynamics in construction and operations
During August, local state-owned enterprises actively launched affordable rental housing and talent apartment projects. Notable examples include Xi'an Chengui Xiyu·Weishuiyi (West Zone), Chengdu Rail City·Yujian Zhonghuan, Xiamen Anxinju Meifeng Community, Hangzhou Ningchao Yuyu Xianting, and Zhengzhou Chengfa Anju Fengqi Meiyu. Among these, the Xiamen project stands as the largest affordable rental housing initiative in the Xiamen East Sea area, offering 3,664 units, while the Chengdu development represents the city's first dual-rail transit-oriented development affordable rental project, introducing 541 units.
Market-oriented long-term apartment operators also brought projects online in August, including Jingdezhen Taoxichuan Ziruli, Weilal Xingchen·Poyu Yuan'er, and Shanghai Marriott Executive Apartments. The Weilal Xingchen project, a joint effort between Weilal Science City Group and Vanke Poyu, introduced nearly 1,500 units.
Business expansion moves
In strategic partnerships, Shanghai United Assets and Equity Exchange teamed up with Huazhu Group on hotel-apartment real estate ventures, while Chuangxin Group signed a deepened cooperation agreement with Beijing Housing Security Center focusing on affordable rental operations and urban renewal. On the listing expansion front, Lehu won the bid to operate the Quzhou Youth Talent Apartment project, and Shangshi Urban Development leased 12 floors of Shangyao Xinya Tower for conversion into mid-end white-collar long-term rental apartments. In service innovation, Shenzhen Anju launched the "Lezuzu" trading platform, featuring zero intermediary fees and a housing verification mechanism to support young tenants.
Brand development initiatives
Shanghai Chengdu Kuanting unveiled its "Xiangxin 3+1" strategic upgrade framework in August, leveraging asset, brand, and experience empowerment alongside a digital foundation to elevate rental living services. The company also released ten upgraded lifestyle scenarios and a new membership benefits system aimed at improving the rental experience for young professionals. Jinqiao Hotels introduced a dual-brand lineup—"Tuling Apartment" and "Lingju Apartment"—designed to serve enterprise employees with bed-level accommodation and urban youth with quality room-level rentals, respectively, spanning the long-term rental spectrum from blue-collar to white-collar housing.
Financing trends
On the public REITs front, the Guotai Haitong China Construction Rental Housing REIT received regulatory approval from the CSRC, while projects such as Zhengzhou Chengfa Anju REIT, Jinan Chengfa Rental Housing REIT, and Wuhan Anjia Affordable Rental REIT continue to advance steadily. In terms of expansions, Hongtu Innovation Shenzhen Anju REIT initiated its first expansion audit service procurement, moving intermediary selection into the operational phase. On the private side, CCB Housing Rental Fund's 5-billion-yuan ABS expansion received feedback from the Shanghai Stock Exchange. Additionally, Yizhuang Holdings' industrial park talent apartment inter-institutional REIT was accepted by the exchange with a proposed issuance amount of 1.051 billion yuan, while Changping Affordable Housing and Xiangyu·Manbai Future Talent Community REITs are advancing service provider selection work. In credit support, Xiangtan City completed its first affordable housing acquisition loan totaling 60 million yuan, earmarked for purchasing 136 units across three developments for conversion into affordable rental housing.
Policy developments
Central government measures
On August 18, the State Council issued a decision to revise the Housing Provident Fund Management Regulations, marking the third systematic amendment since its 1999 enactment. The revisions focus on broadening withdrawal and usage scope, enhancing management efficiency, and strengthening risk controls, with the updated regulations taking effect on September 20, 2026. The new rules actively encourage using provident funds for rental payments: "rent payment" has been elevated to the top priority among withdrawal purposes, previously ranked sixth in the 2019 version. Additionally, the restriction requiring rent to exceed a specified proportion of household wage income has been removed, significantly lowering the barrier for renters to access their provident funds.
On August 28, the China Securities Regulatory Commission issued opinions on capital market support for building a new real estate development model, clearly promoting a shift in financing logic from reliance on entity credit to project-based assessments. Future financing approvals will place greater emphasis on project compliance, profitability, and cash flow quality, a transition that benefits enterprises with quality rental assets in accessing new funding channels through REITs and ABS. The opinion also supports issuing REITs backed by eligible rental housing and urban renewal projects or incorporating such assets into existing listed REITs as expansion properties. It calls for studying optimized supervision of rental housing original equity holders and project net cash flow distribution rate requirements, potentially lowering the threshold for rental housing projects to issue REITs and enhancing enterprise participation willingness. Additionally, the document advocates continuing the pilot of private real estate investment funds, complementing public REITs to complete the "invest-finance-construct-manage-exit" cycle and diversify funding support for the rental market.
Also on August 28, the People's Bank of China and the National Financial Regulatory Administration jointly issued guidance on reforming and improving real estate credit management to accelerate the new real estate development model. This document systematically regulates rental housing loans: development and construction loans generally carry terms of three years, extendable to a maximum of five; group home purchase loans can extend up to 30 years with LTV ratios capped at 80%; operating loans for self-owned long-term rental properties can reach 20-year terms with LTV limits of 80%, while non-self-owned renovation projects face five-year maximum terms with limits of 70% of receivables. For projects where development and operation are undertaken by the same entity, operating loans may replace earlier development loans. These provisions align with the 2024 policy on financial support for the rental housing market, with this reiteration aimed at systematically elevating existing rental housing financing arrangements from special supportive measures into core components of the real estate credit framework—a shift that stabilizes financing expectations and supports the cultivation of the rental market under the rent-and-purchase dual-track housing system.
Local government initiatives
On the regulatory front, Tianjin solicited public feedback on detailed rules for public rental housing management, covering application procedures, rent and contract terms, eligibility changes, and lease renewals. In terms of supply diversification, Shanghai accelerated the acquisition and conversion of second-hand homes into affordable rental housing while expediting renovation projects to boost supply in central urban areas. Chengdu explored market-entity purchases of second-hand properties in high-demand affordable rental zones, and Hefei sought feedback on converting low-efficiency existing urban land from commercial use to affordable housing and public services. Zhengzhou proposed converting surplus public rental housing units—either those exceeding local demand or vacant for over six consecutive months—into affordable rental housing. On financial support, Zhengzhou refined management rules for land disposal in affordable rental REITs issuance, clarifying land ownership adjustments, pricing calculations, processing procedures, and operational oversight. For talent housing, Shanghai's Chongming District released implementation measures for new employment youth housing support, opening application channels for differentiated rental subsidies based on district location.
Rental housing supply updates
Shanghai added 30,000 units of affordable rental housing in the first half of 2026, achieving 60% of its annual target of 50,000 units, with cumulative supply reaching 434,000 units. The city also added 15,932 beds in "New Era Urban Builder and Manager Homes," hitting 53% of its 30,000-bed annual goal, accumulating 89,000 beds. Xiamen aims to accumulate at least 5,000 units of newly added subsidized housing by 2030. Wenzhou plans to complete delivery of 38,000 units of affordable rental housing during the "15th Five-Year Plan" period.
Key observations
Market heat moderates while first-tier rents continue rising
As the peak season for graduate rental demand drew to a close, overall market momentum eased compared with July. Average rents across the 50 cities continued their upward trajectory but with significantly narrowed month-on-month gains. The year-on-year decline in average rents has been consistently narrowing since March 2026, reaching the smallest contraction in nearly 24 months by August—a strengthening signal that key city rents are stabilizing at a floor. By tier, first-tier cities maintained rent increases, driven primarily by Shanghai and Shenzhen. Shanghai has led the 50-city rankings for month-on-month gains for five consecutive months, while Beijing and Guangzhou saw rents turn to month-on-month declines. Over the January-August 2026 period, first-tier city rents accumulated a 1.21% increase, further cementing their recovery foundation. Second-tier and third/fourth-tier cities continue to face adjustment pressure, with cumulative declines for the period, though both narrowed compared with the same periods in 2024 and 2025, indicating a moderating market correction overall.
Leasing arms of major developers maintain high occupancy with mixed revenue results
With listed developers disclosing first-half 2026 results in August, data from major housing enterprises' rental operations revealed generally stable performance. Vanke Poyu, Longfor Guanyu, China Merchants Shekou Long-term Rental Apartments, and China Resources Youchao maintained high average occupancy rates, with stabilized projects typically reaching 95% or above. Revenue performance varied based on asset structure: Vanke Poyu and Longfor Guanyu, with higher proportions of mid-asset model operations, faced pressure from sustained rental declines. Both entities proactively adjusted existing project cooperation terms and optimized asset portfolios, resulting in over 10% year-on-year revenue declines. In contrast, central state-owned enterprises like China Merchants Shekou, China Resources Youchao, and China Overseas Long-term Rental Apartments, primarily operating heavy-asset or balanced models, saw steady operational growth and year-on-year revenue increases. Collaboration between market-oriented rental operators and local state-owned enterprises also deepened. Leveraging mature operational capabilities, Vanke Poyu strengthened strategic partnerships with SOEs in Shanghai and Hefei, completing multiple project collaborations with Shanghai DiChan FaZhan and Hefei's Haiheng Group in the first half of 2026, enhancing state-owned asset utilization efficiency and providing quality housing for industrial talent.