Chinese Families Flee Real Estate for Stocks Amid Low Rental Yields

Chinese families are increasingly turning away from real estate investments as property's share of household assets has dropped to 52% in the first quarter of this year from 67% in mid-2021, according to a Goldman Sachs report.

This shift is part of a broader structural change where savings are migrating towards broader financial assets due to low deposit rates. The report notes that property's role in wealth accumulation is fading, and households are seeking more balanced and diversified asset structures.

Yu, a Beijing homeowner, cited concerns about population decline and low rental yields as reasons for considering selling her flat, valued at 2.1 million yuan (US$310,260), which generates only 4,500 yuan in monthly rent, an annual yield of 2.6%. She may wait for a better exchange rate before investing abroad.

Mainland Chinese families are deliberately liquidating non-core, investment-driven properties to make their asset structures more balanced and diversified. Direct stock holdings among Chinese households have edged up to 6% in the first quarter this year from 5% in mid-2021, with only a quarter of adults participating in the equity market.