Photo: VCG

The latest cases of COVID-19 are starting to take their toll on Beijing's rental market, dragging down prices amid the city's recently tightened control measures and despite the upcoming graduation season, which is usually expected to boost the sector.

The total market volume in Beijing plunged more than a third from June 15-21 compared to the week prior, according to statistics from Lianjia.com, one of the biggest real estate brokerage companies in China. 

A real estate agent from Lianjia.com told the Global Times on Monday that rents are plummeting sharply this week in Beijing, with average prices dropping around 15 percent, mostly due to recently upgraded coronavirus control measures and a decline in clients. 

"Compared to the last few weeks, fewer clients are down to visit apartments in person," said the agent, surnamed Liu, "and some residential compounds are very difficult to get into. A few compounds with tighter controls simply refuse agents entry to give a tour to someone who does not live there."

Beijing raised its COVID-19 emergency response level from 3 to 2 on June 16, following a new outbreak in Xinfadi market in the capital's Fengtai district. Under the new response level, residential compounds are required to have tighter access controls, and access to public venues is also limited. 

According to Liu, the average monthly rent for a three-bedroom apartment in Beijing's Chaoyang district has shrunk as much as 2,000 yuan ($282.60) from a previous 12,000 yuan. And for two-bedroom flats rents have been trimmed by around 1,000 yuan per month. 

Graduation season in China begins in June, and will see 8.74 million students leaving university and looking for homes off campus. But this year the market is hurting from the absence of graduates, many of whom are either unable or unwilling to return to the city due to tight travel regulations and a grim job market.

A student surnamed Wu who was supposed to return to Beijing for her graduation in June told the Global Times that she has had to cancel her booking on Airbnb, because she is basically "stranded" in her hometown of Wuhan, Central China's Hubei Province, as her university has once again denied her request to return to campus following the new COVID-19 outbreak.

"I booked an Airbnb apartment for a month as a temporary home before I could find a long-term place to stay. Under the current regulations I cannot go back [to Beijing] without the university's approval," Wu said. "Judging by the current situation, I don't think I will be allowed to go back very soon so I canceled my booking."

Some other students have made similar choices because they have not found a job due to the impact of the coronavirus. 

According to Wu, students from her university who are stranded in Wuhan have formed a group on WeChat. The group has around 100 students, but so far only 11 have found jobs in Beijing or are still looking for, and will rent a home in the near future. 

The shortage of incoming job-hunting students spells particular disaster for subleasing platforms like Airbnb, which act as intermediaries between landlords and tenants, and were banking on the seasonal bump. 

With cash flows squeezed by the sudden shrinkage of potential clients, several rental companies have already been dragged into controversy amid the prolonged quarantine period. Take rental platform Danke as an example. It asked landlords to waive a month's rent to offset losses incurred during quarantine earlier this year, sparking wide backlash from both landlords and tenants. 

"The pressure on the rental market in Beijing is not likely to be lifted in the short term because of grim employment prospects," Yan Yuejin, research director at the Shanghai-based E-house China R&D Institute, told the Global Times.

"In the long run, rental demand will of course remain high in a first-tier city like Beijing. But compared to previous years, rental companies and landlords will have to brace for a steady decline in rents, at least in the coming months," Yan said.