China's Property Slump Drags Down Property Management Firms
China's prolonged real estate downturn is severely impacting property management companies. The average collection rate for management fees among the top 500 firms fell from 89% in 2021 to 71% in 2024, marking a fourth consecutive year of decline. Homeowners, burdened by falling property values and a weak economy, are refusing or unable to pay fees, forcing some management firms to withdraw from communities and creating a vicious cycle. Experts warn that property values in mismanaged communities could drop by as much as 25%.
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- 📰 Published: June 3, 2026 at 14:17
- 🔍 Collected: June 3, 2026 at 14:27 (10 min after Published)
- 🤖 AI Analyzed: June 6, 2026 at 22:06 (79h 39m after Collected)
(Central News Agency reporter Li Yawen, Taipei, 3rd) China's sluggish real estate market is impacting property management companies. Against a backdrop of economic weakness, some homeowners are struggling to afford management fees; others, no longer expecting to recoup their investment from real estate, are unwilling to continue paying. Property management companies are facing a crisis in fee collection.
Data from the real estate research firm CRIC shows that the average collection rate for management fees among China's top 500 property management companies fell from 89% in 2021 to 71% last year, declining for the fourth consecutive year. The main reasons include a rising vacancy rate for new homes and falling housing prices, which have dampened homeowners' willingness to pay.
He Shuhua, Chief Operating Officer of Onewo, recently stated at a forum that the risks from the overall slowdown in the real estate market are gradually spreading to the property management industry. Falling housing prices are changing homeowners' expectations, making fee collection difficult, a problem now common across the entire industry.
Reuters reported on the 3rd that Chinese property management companies are facing difficulties in collecting management fees. Against a backdrop of economic weakness, some homeowners cannot afford the fees and try to pressure companies into lowering prices by refusing to pay. Some homeowners who own multiple properties no longer expect to recover their investment from real estate and see no need to continue paying management fees.
ANZ estimates that the total floor area of unsold homes in China is roughly equivalent to the size of two Greater London areas. After decades of real estate development, many residential communities have high vacancy rates. These communities often include financially troubled developers who owe management fees for unsold properties.
This threatens to become a vicious cycle. A declining average fee collection rate forces property management companies to withdraw from communities, making homeowners and developers worry about further property value depreciation, which further reduces their willingness to pay fees. Communities without management face problems like uncollected garbage, lack of security, and broken, unrepaired elevators, increasing pressure on local governments to intervene.
Sam Radwan, CEO of Enhance International, a real estate consulting firm based in Chicago, USA, said this is a unique and significant problem not seen in other real estate crises. He believes that property values in communities with dysfunctional management could fall by as much as 25%.
A senior executive at a property management company, speaking on condition of anonymity, said they would rather withdraw from a management project than get bogged down in lengthy legal battles with residents who refuse to pay fees. Another manager at a state-owned property management company said that in some cases, local governments have even prevented the original company from withdrawing because residents couldn't find a replacement within the three-month notice period, stating, "(Because) it could affect social stability."
The China Property Management Institute points out that an average fee collection rate of 85% is the industry's recognized operational warning line. Only at this level can basic operating costs be covered. Several county-level local governments in China have previously issued initiatives calling on public officials and party cadres to take the lead in paying management fees. (Editor: Lyu Jiarong) 1150603
Data from the real estate research firm CRIC shows that the average collection rate for management fees among China's top 500 property management companies fell from 89% in 2021 to 71% last year, declining for the fourth consecutive year. The main reasons include a rising vacancy rate for new homes and falling housing prices, which have dampened homeowners' willingness to pay.
He Shuhua, Chief Operating Officer of Onewo, recently stated at a forum that the risks from the overall slowdown in the real estate market are gradually spreading to the property management industry. Falling housing prices are changing homeowners' expectations, making fee collection difficult, a problem now common across the entire industry.
Reuters reported on the 3rd that Chinese property management companies are facing difficulties in collecting management fees. Against a backdrop of economic weakness, some homeowners cannot afford the fees and try to pressure companies into lowering prices by refusing to pay. Some homeowners who own multiple properties no longer expect to recover their investment from real estate and see no need to continue paying management fees.
ANZ estimates that the total floor area of unsold homes in China is roughly equivalent to the size of two Greater London areas. After decades of real estate development, many residential communities have high vacancy rates. These communities often include financially troubled developers who owe management fees for unsold properties.
This threatens to become a vicious cycle. A declining average fee collection rate forces property management companies to withdraw from communities, making homeowners and developers worry about further property value depreciation, which further reduces their willingness to pay fees. Communities without management face problems like uncollected garbage, lack of security, and broken, unrepaired elevators, increasing pressure on local governments to intervene.
Sam Radwan, CEO of Enhance International, a real estate consulting firm based in Chicago, USA, said this is a unique and significant problem not seen in other real estate crises. He believes that property values in communities with dysfunctional management could fall by as much as 25%.
A senior executive at a property management company, speaking on condition of anonymity, said they would rather withdraw from a management project than get bogged down in lengthy legal battles with residents who refuse to pay fees. Another manager at a state-owned property management company said that in some cases, local governments have even prevented the original company from withdrawing because residents couldn't find a replacement within the three-month notice period, stating, "(Because) it could affect social stability."
The China Property Management Institute points out that an average fee collection rate of 85% is the industry's recognized operational warning line. Only at this level can basic operating costs be covered. Several county-level local governments in China have previously issued initiatives calling on public officials and party cadres to take the lead in paying management fees. (Editor: Lyu Jiarong) 1150603
FAQ
Why can't Chinese property management companies collect fees?
Because falling home prices and a weak economy have reduced homeowners' willingness and ability to pay.
What happens when the fee collection rate drops?
It can lead to a vicious cycle where management companies withdraw, communities become mismanaged, and property values fall further.
How is the Chinese government responding to this issue?
Some local governments are urging public officials to pay fees and are even preventing management companies from withdrawing.