I went to Hangzhou and didn't expect the rent to drop so sharply

Indeed, nationwide rents are declining in 2024. From a macro perspective, first-tier cities have slightly decreased, while second-tier cities have all dropped. Moreover, the market no longer has the so-called off-peak and peak seasons. Several agents I contacted last year felt that even the graduation season was not as lively as in previous years. For example, in Shanghai, where we are based, there was a strong sense of this last year. A colleague in Xujing had a monthly rent of 4,400 yuan in 2023. By the end of 2024, when trying to negotiate a rent reduction with the landlord, before making any effort, the landlord had already cut the rent by 200 yuan. Including just this past December, I planned to change my rental from Baoshan to Pudong Zhonghuan and looked at more than a dozen apartments with the agent, where I could basically cut down the rent by an average of 300 yuan per unit. But what surprised me the most was Hangzhou. As you can see from the numbers, the cumulative rent drop in Hangzhou by the end of 2024 is 5.38%. Data source: Zhongzhidata CREIS This figure is the second highest in the country and ranks first among new first-tier cities. We have visited Hangzhou many times before, and my impression, aside from the Asian Games, is that it is the most proactive and successful city in attracting people. In recent years, more and more young people have flocked to Hangzhou, treating it as the place where their dreams begin. As one of the leading cities among the new first-tier cities, I never expected the rent to drop so drastically now. What has happened to Hangzhou? Or rather, what has happened to the rental market in Hangzhou? So this time, I booked a high-speed train ticket from Hongqiao to Hangzhou East overnight. Real shot of the waiting hall at Hangzhou East Station. After visiting seven typical communities in popular areas such as downtown Hangzhou, East City, and the Olympic Sports Center, I was surprised to find that their rental situations were like this. 01 Especially for these types of houses, the prices have dropped to an unexpected level. For example, the old and shabby apartments in the city center, which were once the most expensive, have now lowered their prices. In previous years, old and shabby apartments in downtown Hangzhou maintained high rents due to their good locations. For instance, the Shijia Garden on Fengqi Road. ![](https://mmbiz-qpic.wscn.net/mmbiz_jpg/3ePUxSysiaYfNuNKiakerpquNfQHUb8aZV8HvCkPcS91qhtNPbJrKr9w/640? wx_fmt=jpeg&from=appmsg) Fifteen Garden real shot Right next to the favorite Huanbei Silk City of the aunties in Shanghai, a prime location, absolutely central. But according to the agent, last year there was a general drop of 10-15% in this area. At the end of 2023, a 50㎡ two-bedroom in Fifteen Garden rents for at least 4000 yuan/month. But now, I went to see a 45㎡ two-bedroom with a similar area. And it is fully renovated, renting for 3500 yuan/month. Fifteen Garden 45㎡ two-bedroom The area difference is only 5 square meters, but I calculated it lightly, and it has dropped by 12.5% year-on-year. Including a 52㎡ two-bedroom in the Lin Si Hou community across the street. The agent told me that this house has had its price adjusted 3 times on their platform, and it just dropped to the highlighted position a few days ago. Moreover, the landlord here is very straightforward, willing to accept a direct cut of three hundred and asking when to move in. I can only say that the closer it gets to the end of the year, the more intuitive the landlord's anxiety becomes. After looking at the old and small, of course, I also have to look at newer houses. And speaking of this, I have to mention the new heavyweight in the eastern city, Greentown Yangliu County. The agent told me that the market here has always been pretty good, with over 300 units rented out in previous years, and a 100㎡ three-bedroom can rent for over 8000 yuan per month. Of course, it has dropped in 2024, but most landlords are relatively stable in their mindset. I compiled the rental prices for this type of unit listed on Lianjia at the end of 2024. Currently, the average monthly rent is still above 7200 yuan/month, down by 9.2%. ![](https://mmbiz-qpic.wscn.net/mmbiz_png/3ePUxSysiaYfNuNKiakerpquNfQHUb8aZVo8Dy0ibPmX8Eib69FWlbxCshAjicIjjYFFAOGrcdOETNV8VluhYkRgO4Q/640? Among them, the lowest-priced option is a 109 square meter three-bedroom on a low floor, with a rent of 6,800 yuan/month. I asked if it could be rented for 6,500 yuan/month. The agent hesitated a bit, saying the landlord might not give such a large discount right away, as the rent for the past two years has been 7,500-8,000 yuan/month. Compared to the previous old and shabby landlords, the landlords here are indeed more confident. There is also a category of properties that are declining. These are the apartments and large flat units that investors favored in previous years. But there are still differences between the two. The first one I went to see was an apartment, standing under the Regal International Center. The scene of 20,000 internet celebrities squeezed into partitioned rooms still lingered in my mind. But upon entering, I found that since the "Alcohol Ban" (strict prohibition of small-sized hotel-style apartments) was implemented in 2018, the rental market here has remained relatively healthy. The rent for a one-bedroom apartment was 2,900 yuan/month two years ago, and now the price listed by the landlord is 2,500 yuan/month, a decrease of 13.8%. The agent was very enthusiastic and helped me negotiate a further discount of 380 yuan on-site. The price drops in several popular apartment complexes vary. Source: Market research and publicly available data, for reference only. However, compared to the overall market tone, the extent of the declines is not too exaggerated. As for some newly popular large flat units, it’s a different situation. Especially in the most popular areas like Olympic Sports Center and Qianjiang Century City, the rents have already been relatively high. For example, the Olympic Sports Center has always been at the top tier of rents in Hangzhou. Compiled from: Lianjia, publicly available information, for reference only But there is also a larger decline space in 2024. Especially for top-tier properties like Zhen'ao Courtyard. Agents revealed that the rent at the end of the previous year was 20,000/month, and by the end of 2024, it has reached a lower limit of 13,000/month. Luxury residential communities like Genesis and Xujing Huating are facing the same situation. Especially the large unit I viewed in Xujing Huating, where the previous tenant moved out in early December. It has been vacant for more than a month now, and with the upcoming Lunar New Year, it will face about two more months of vacancy. So the landlord is quite nice, willing to cut another 300 on this basis and cover the property fee. Moreover, apart from the agents from Greentown Yangliu County, agents from other sectors are quite confident about negotiating prices. After all, no one wants to lose several thousand in rent for January and February just to save a few hundred with the tenant. It is evident that for most local landlords in Hangzhou, 2024 is likely to be the hardest year to retain tenants. 02 Not only the landlords of these communities, but the entire rental market data is not very optimistic. I have compiled the rental data of Hangzhou in recent years. It turns out that the rental market in this city has not been unusual since today. In fact, it has not been very optimistic for nearly four years. Data source: Hangzhou Beike Research Institute In 2021, the average monthly rent in Hangzhou was still 52.81 yuan/sqm. But by 2023, the average monthly rent has reached the critical point of 50 yuan. Last year, there are only average data for the first 11 months, which looks basically the same as in 2023. However, considering the low point at the end of the year, it is uncertain whether this number can stabilize. In November of last year, the monthly rent in Hangzhou had already reached the lowest in nearly four years. Data Source: GuoXinda Aside from a slight month-on-month increase during last July's graduation season, which was so small it could almost be ignored, the overall trend has been like a slide, continuously declining from the beginning of the year to the end. Given this trend, it is not very optimistic whether the annual average can maintain the 50 yuan baseline for 2023. In this macro environment, almost no sector in Hangzhou escaped the fate of rent reduction last year. According to data from the Beike Research Institute, among the 118 sectors in the ten districts of Hangzhou, 90 sectors saw a decline in rent, accounting for over 70%. So I selected 24 representative sectors from eight of these areas and conducted one-on-one online surveys with local agents, resulting in an average. This means the overall city average has dropped by approximately 13.7%. This is the specific situation. Data Source: Market survey on January 1, 2025, for reference only. The selection range includes 8 areas and 24 representative sectors, not representing the entire city data. It can be seen that each area has one or two sectors where rent has dropped significantly. For example, the Olympic Sports Center in Binjiang, the Future Technology City in Yuhang, as well as the Xixi and Linping New Town sectors, all exceeded 20%. Especially the Olympic Sports Center area and the Future Technology City. Based on my survey of a 90-square-meter three-bedroom unit, the monthly rent in these two sectors at the end of the year has dropped by 1200 yuan compared to the same period last year. However, there are also areas where the decline is not significant, generally between 5%-10%. For instance, the relatively remote Linping Donghu and downtown Xiaoshan. The rent levels in these sectors were not that high to begin with, with less room for fluctuation. The squeezed space for 2024 is only around 200-300 yuan. However, according to the perception of agents in various sectors, overall, rents in Hangzhou have decreased by 300-1000 yuan year-on-year this year. On the phone, they sounded somewhat helpless, using terms like "dropped a lot" and "this price was impossible to rent before." But based on my on-site visits, if one is willing to negotiate, the listed rents are not the lowest. In fact, landlords' psychological bottom lines can be reduced by another 200 yuan or even more. Of course, some landlords are eager to rent out and have directly listed their bottom prices before the end of 2024. But it seems to be a kind of test as well. Screenshot from: Hangzhou Lianjia If there are many inquiries but the properties still can't be rented out before the New Year, the prices can only be further lowered. 03 So, why is it specifically Hangzhou? In recent years, our platform has paid considerable attention to Hangzhou. It is not difficult to find that such a large-scale comprehensive rent reduction has long been traceable in Hangzhou. The first and most direct reason is the industrial structure is not diverse enough. Over the past decade, Hangzhou has risen due to e-commerce. Every new first-tier city hopes to have its own Alibaba, but clearly, not all cities can be called Hangzhou. From the capital of e-commerce to the capital of internet celebrities, this long board is long enough to drive a city forward rapidly. However, behind it, other short boards seem somewhat powerless. So when the live-streaming e-commerce industry transitioned from rapid growth to contraction, Data source: iResearch Consulting There are not so many internet celebrity anchors and young people coming to Hangzhou anymore. Especially some top anchors have already moved away with their families. For example, the year before last, a prominent figure rented an entire floor at Shimao Wisdom Gate, spending millions on renovations. However, just over a year later, the place is empty. It must be said that before a large number of internet celebrities withdrew from Hangzhou, they indeed helped families lower rental prices. Also exiting the market are the investors. Especially those landlords who bought new houses in recent years, with falling housing prices, are now not planning to sell their houses. As a result, there is a huge amount of new houses being resold for rent in the market. For example, the Yangliu Jun mentioned earlier, the location of Genbei New City is a large residential area. As a super large project in Genbei, there are nearly 5,000 households in just the Greentown Yangliu Jun. In this area, on Jiuhe Road and Xintang Road, most of these gray blocks are either new or pending delivery communities. I roughly counted, and there are more than 15 in total. One can imagine the scale of such housing resources. Including areas near Gouzhuang and the Asian Games Village around the Olympic Sports Center, new houses delivered in recent years have also clustered together. These newly delivered blocks or their surroundings will form a serious oversupply by 2024. A sharp decline in rental prices is also expected. Moreover, new houses in Hangzhou continue to be supplied in large quantities Data source: Chao News Beautiful Life Research Institute It is clear that by 2023, the delivery of new homes in Hangzhou has reached a peak. In addition to those homeowners who never intended to sell, there are also popular new homes that triggered a five-year sales restriction, which will still be under restriction in 2024. They can only flow into the rental market. As a result, this year has been even more difficult for homeowners in Hangzhou. However, this does not account for the volume of guaranteed rental housing. In a previous article on massive guaranteed rental housing, I had already compiled the data for Hangzhou. By the end of June 2024, Hangzhou had actually gathered 60,100 units of guaranteed rental housing, while the new supply was 13,000 units. Not only is the delivery volume large, but the rent is also not too high. For example, the Ningchao Meidi Apartment in the Asian Games Village charges a monthly rent of 2,350 yuan for a 40-square-meter one-bedroom unit, and only 3,500 yuan for a 60-square-meter unit. Compared to market prices, this is equivalent to a 40% discount. The large delivery combined with rents at 60-70% of market prices will undoubtedly have a significant impact on the rental market in 2024. 04 In fact, after conducting on-site visits and online market research, I felt quite emotional. Hangzhou is indeed facing some challenges, and a series of issues reflected by the decline in rent are real. However, besides the single industry and oversupply, the rental market in Hangzhou is also the result of multiple factors. One fundamental factor is that the real estate market itself has been in an adjustment period over the past two years. Many second-tier cities that have been significantly affected are also beginning to adapt to the next stage of the industry. Hangzhou is certainly no exception. But through these two years of on-site visits, we can feel that the underlying character of Hangzhou as a city remains youthful. For example, initiatives like the “Spring Rain Plan” that directly offer money and provide free accommodation for fresh graduates to attract talent Including recent data from Zhilian Recruitment, it reflects the true status of Hangzhou in the hearts of young people. Source: Zeping Macro, Zhilian Recruitment Among the favorite cities of post-95s, Hangzhou ranks as the first city in the country after Beijing, Shanghai, Guangzhou, and Shenzhen. This is well-deserved and is the result of Hangzhou's active pursuit of youthfulness over the years. I believe that after this period of industry adjustment, the future of Hangzhou will still be better. Author of this article: Zhen Jiao Lu Jun Team, Source: Zhen Jiao Lu Jun (ID: gh_30ed65343713), Column author of Wall Street News, Original title: "I Went to Hangzhou and Didn't Expect the Rent to Drop So Much" Risk Warning and Disclaimer The market has risks, and investment requires caution. This article does not constitute personal investment advice and does not take into account the specific investment goals, financial conditions, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article are suitable for their specific circumstances. Investing based on this is at one's own risk