Shanghai Housing Monthly Rent Prices Drop Nearly 20%
Mass Worker Exodus at Foxconn Factory Also Reported
[Asia Economy Reporter Park Hyun-joo] As COVID-19 spreads across China, authorities continue to enforce lockdown measures. Consequently, in Shanghai, the wealthiest city in China, both foreigners and local affluent residents are packing up, causing local housing rents to drop by about 20%.
According to the Hong Kong South China Morning Post (SCMP) on the 30th, Chinese real estate data provider 'Creprice' analyzed that last month, Shanghai's housing rents fell by an average of 5.6% compared to the previous month, reaching 102.71 yuan (about 20,000 KRW) per square meter (㎡). The company forecasted that the average rent could drop by an additional 1%.
The report stated that a three-bedroom apartment in downtown Shanghai had a monthly rent of about 20,000 yuan (approximately 3.91 million KRW) as of June, but currently, it has fallen to 15,000 yuan (about 2.93 million KRW). Shanghai real estate agent You Liangzhou told SCMP, "Landlords are disappointed by the weakening demand for housing," adding, "For luxury homes, landlords cannot find tenants unless they reduce the rent by at least 20%."
The decline in housing prices is attributed to the departure of foreigners and local wealthy residents due to COVID-19 lockdown measures. Shanghai authorities implemented a full lockdown for about two months starting from the end of March. The lockdown, initially announced for one week, was extended, leading local residents to face shortages of food and daily necessities. SCMP reported, "It is known that more foreigners and top-tier wealthy residents are considering leaving Shanghai."
Currently, Chinese authorities maintain strict lockdown measures to prevent the spread of COVID-19. Particularly in Zhengzhou, Henan Province, known for a high number of infections, from mid-month, depending on the area, orders for complete outdoor bans or prohibitions on leaving residential complexes were issued, and non-essential businesses were closed. According to health authorities, as of the 30th, a total of 509 confirmed cases were reported in Henan Province. Foxconn (Hon Hai Precision Industry) Zhengzhou Apple iPhone production plant has also been sealed off since the 19th due to multiple confirmed cases, cutting off external contact.
Some workers at the Foxconn Zhengzhou plant reportedly expressed dissatisfaction with the uncontrolled spread of infections and escaped. A Foxconn worker told SCMP that the number of infections within the factory compound surged over the past few days, but management did not promptly isolate infected workers from others. SCMP reported, "Videos showing workers escaping from the Foxconn Zhengzhou plant and walking back to their hometowns have been appearing on social networking services (SNS), and nearby residents have been seen sharing water, food, and clothes with them."
As the situation escalated, Foxconn reportedly announced in the afternoon that it would provide transportation such as buses for workers wishing to return home.
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