Is there any prospect for long-term rental apartments in Wuhan?

Long-term rental apartments have a good prospect and Wuhan has a broad market. In recent years, under the continuous effect of a series of regulatory policies in the real estate industry, housing enterprises have fallen into the dilemma of declining profit margins and increasing financing difficulties. Many housing enterprises began to think about transformation and seek diversified business development to make profits. Among them, the long-term rental apartment market has become the focus of the competitive layout of real estate enterprises.

According to the survey data released by Prospective Industry Research Institute, the current housing rental market has reached 1.3 trillion, and it is estimated that by 2030, the overall market size will reach 4.2 trillion. Up to now, more than 30% of the top 30 housing enterprises in China are accelerating the layout of the long-term rental apartment market, including Vanke, Country Garden, Poly and Longhu.

However, despite the broad prospects, the long-term rental apartment market still faces many pain points. Enterprises in the industry generally have difficulties such as large investment, long cycle and difficult profit. High asset prices lead to low long-term rental returns. According to the data of Ke Rui Research Center, the average profit level of long-term rental apartments is only 2%-4%, and the cash flow recovery cycle needs at least 6 years.