Group 1 - The rental market is experiencing a decline in prices across the country, with major cities like Beijing seeing a drop in rental rates for two-bedroom apartments by nearly 1,000 compared to last year, despite a slight increase in May due to the graduation season [2] - Nationally, rental prices have fallen for three consecutive months, with first-tier cities showing a smaller decline compared to second and third-tier cities, where some areas have seen drops exceeding 10% year-on-year [2][3] - The rental market's downturn has been evident since the second half of last year, with traditional peak seasons failing to stimulate demand, leading to lower occupancy rates in many cities [2] Group 2 - The introduction of affordable rental housing (保租房) is significantly impacting the market, with one project in Chaoyang District offering rents nearly 30% lower than surrounding areas, resulting in a diversion of clients from traditional landlords [3] - The disparity between first-tier and third- to fourth-tier cities is notable, as first-tier cities like Beijing maintain stronger rental support due to industrial presence, while lower-tier cities face more pronounced declines in rental prices [3] - Landlords are exhibiting mixed reactions to the market changes, with some reducing rents by 12% to secure tenants, while others remain resistant to lowering prices, believing that demand in first-tier cities will remain strong [3][4] Group 3 - The shift in power dynamics in the rental market is evident, with tenants now seeking affordable rental options, particularly affordable housing, which is perceived as both cheaper and more reliable [4] - The number of rental listings has decreased significantly, with many landlords resorting to flexible pricing strategies to attract tenants, indicating a cooling rental market [4]

Core Viewpoint - The article discusses the challenges faced by the subletting market, particularly the "二房东" (sub-landlords) in major cities, as rental prices decline and competition increases from long-term rental apartments and government-subsidized housing [6][8][21]. Group 1: Rental Market Trends - The rental market is experiencing a downward trend, with average rents in 50 key cities in China dropping by 2.7% from January to November 2024, and an additional decline of 0.44% expected in the first quarter of 2025 [8][21]. - In major cities, rental prices have reverted to levels seen between 2015 and 2017, with some cities like Guangzhou seeing rents drop to 2014 levels [8][21]. - The increase in housing supply, including government-subsidized rental housing and the expansion of long-term rental apartments, is contributing to the decline in rental prices [7][8]. Group 2: Challenges for Sub-landlords - Sub-landlords are facing significant challenges, with many reporting losses and some even abandoning their businesses due to the inability to rent out properties at profitable rates [5][9]. - The subletting model relies on finding tenants quickly to cover costs, but the current market conditions make it difficult to meet the necessary rental price differentials [6][9]. - The presence of negative perceptions associated with sub-landlords, such as high utility costs and poor living conditions, further complicates their business model [6][16]. Group 3: Market Dynamics and Future Outlook - Despite the challenges, there remains a segment of the market that requires sub-landlords, particularly among property owners who lack the time or resources to manage rentals themselves [12][21]. - The article suggests that while the subletting market is contracting, there are still opportunities for growth in niche segments, particularly for quality rentals that meet specific tenant needs [18][21]. - Experts predict that the subletting market will undergo a phase of consolidation, with many smaller operators exiting the market, leading to a more stable environment in the long run [21][22].