China’s middle class feels the squeeze as property slump hits pocketbooks

China saw its lowest property income growth for over a decade as the real estate sector continued a protracted slump, a phenomenon that has reduced middle-class incomes and made consumption all the more important for the country’s economy.

Per-capita net property income was 3,435 yuan (US$473.5) last year, a year-on-year increase of 2.2 per cent – the lowest growth rate observed since 2014.

Official figures reveal a downward slide in growth since 2019, with 2021 and its 10.2 per cent growth the sole exception.

Net income from property – primarily rent, interest and dividends – is a crucial component of household income in economically developed regions. Negative growth in this metric suggests a considerable portion of the middle class is seeing their assets depreciate.

In Beijing, for example, per-capita net income from properties in 2024 decreased for its third consecutive year. The figure fell by 0.6 per cent from the previous year to 12,205 yuan, more than one-fifth of the city’s per-capita wages.

The decline can be primarily attributed to rent decreases. In December, the average rent in a selection of 50 Chinese cities experienced a 3.3 per cent year-on-year decrease, according to data from real estate research institution China Index Academy. Beijing saw a 5.4 per cent drop.

  

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