Summary of the Housing Rental Market in China for H1 2025 Core Viewpoint The rental market in key cities in China is experiencing slight fluctuations, with an overall average rental price decline of 1.37% across 50 cities in the first half of 2025, while first-tier cities show more stability [1][2]. Group 1: Rental Price Trends - The average rental price in 50 cities decreased by 1.37% in H1 2025, with a more pronounced decline compared to the same period last year [2][4]. - In June 2025, the average rental price was 35.0 yuan per square meter per month, reflecting a month-on-month decrease of 0.27% and a year-on-year decrease of 3.71% [2]. - First-tier cities experienced a smaller rental price decline of 0.56%, while second-tier cities saw a drop of 1.83% and third/fourth-tier cities a decline of 1.47% [4]. Group 2: Rental Income Ratio - The rental income ratio across 50 cities averaged 16.4% as of June 2025, down from 17.8% in June 2024, indicating a gradual decline [6]. - Major cities like Beijing, Shenzhen, and Hangzhou showed significant decreases in their rental income ratios compared to the previous year [6]. Group 3: Investment Returns - The rental-to-price ratio in key cities increased to 2.17% by June 2025, up from 2.09% a year earlier, indicating improved rental returns for quality assets [8][10]. - The rental market is benefiting from rigid demand and improved rental quality, leading to a more favorable investment environment [10]. Group 4: Affordable Rental Housing - As of the end of 2023, 573,000 affordable rental housing units have been completed, achieving 66% of the "14th Five-Year Plan" target of 870,000 units [11]. - The pace of affordable rental housing collection may slow down in 2025, with many regions lowering their annual targets compared to 2024 [12]. Group 5: REITs Performance - The overall performance of affordable rental housing REITs showed a slight decline in Q1 2025, with income and net profit generally decreasing by less than 6% [16]. - The issuance of affordable rental housing REITs has accelerated, with two new REITs launched in H1 2025, bringing the total to eight and raising nearly 12 billion yuan [16].