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Beijing's property rent drops in Oct

By Zhao Tingting (chinadaily.com.cn)
Updated: 2008-11-21 16:22

Beijing's property rental market, which had maintained its upward trend since early this year, saw its first decline in October, according to a report from The Beijing News on Friday.

The city's average property rent in 11 districts dropped 2－3.5 percent in October, according to statistics from Home Link Real Estate Consultant Co Ltd, a property brokerage company. Monthly property rents for apartments with bedrooms of one, two and three declined 1.2 percent, 2 percent and 3.5 percent respectively to 1,917 yuan ($280), 2,320 yuan and 2,922 yuan.

"The sluggish demand resulted in property owners' having lower expectations for property rent", said Wang Zhiwei, a director with Home Link. Meanwhile property rental deals slumped 5.05－15 percent in October.

Certain areas in Beijing suffered an even sharper drop in the property rental market.

Wangjing in eastern Beijing, for example, used to be famous as a habitat for Korean tenants. Yet, affected by the financial crisis and the increasing depreciation of Korean Won, many of them decided to go back to their own country. As a result, the average property rent there went down 12.5 percent month on month in October, according to 5i5j, a real estate brokerage company.

A South Korean woman surnamed Park said she decided to quit her rent in Wangjing and go back to Seoul. Living expenses here, such as property rent and food expenditures, are much higher than before due to the Korean Won's depreciation, she said. "10,000 Korean Won was worth 70 to 80 yuan last year, yet only about 50 yuan this year."

The departure of South Korean customers caused a sharp decline in property rental demand and rents in Wangjing, said a broker surnamed Lin, with Maitian Real Estate Agency.

Another area, Shangdi in northern Beijing encountered a 5.2 percent month on month decline in property rental prices in October. Referred as the back garden of Zhongguancun, Beijing's technology hub, Shangdi was filled with students and job seekers in September. Yet property rental demand shrunk by 9 percent in October from the previous month, causing falling property rental prices, said an analysis report from Home Link.

In addition, impacted by the global financial crisis, many enterprises laid off employees or cut salaries, causing people to turn to cheaper property rentals in the suburbs, said an analyst with Centraline China Property Company. Tenants in Sihui near Beijing's central business district (CBD) clearly decreased and property rental prices there fell 2.45 percent month on month in October.