Once a Capital Darling, Now Facing Mass Exits: Why Are Long‑Term Rental Apartments Collapsing?

Mass exits leave workers suddenly homeless

It has been reported that headlined brands such as Mofang Apartment (魔方公寓) and Vanke Boyu (万科泊寓) have been cancelling large numbers of contracts and that many units were forcibly repossessed for unpaid rent, leaving tenants in Beijing, Shanghai, Guangzhou, Shenzhen and Hangzhou suddenly without homes. Danke (蛋壳公寓) and Qingke (青客公寓) — once poster children of the sector — already collapsed after pandemic-era vacancies exposed the business model’s fragility. How did a sector celebrated by policymakers and showered with capital turn into a widespread landlord exodus almost overnight?

How the boom broke

The industry’s rise followed a 2015 policy push to treat renting as a core part of housing policy — the “rent‑and‑purchase parity” approach — and was fuelled by what has been reported as more than RMB 100 billion in financing. Operators expanded by buying or leasing expensive units, renting them cheaply, relying on long‑term collection cycles and on rental‑backed loans (租金贷) to bridge cash flow. Then came a sequence of shocks: pandemic‑driven vacancy spikes, a regulatory crackdown on rent‑loan financing, and the 2023 implementation of the new Housing Leasing Management Regulation (住房租赁管理条例), which caps annual rent increases at 5% and forces 12‑month intervals between adjustments. Slowdown in urbanization and weaker youth employment further compressed demand. The combined effect broke the simple math of “buy high, rent low” and locked capital into illiquid housing stock.

Reinvention or retrenchment?

With the pack‑lease model increasingly exposed as risky, analysts say the sector looks set to shift toward lighter‑asset approaches — brands offering management, tenant sourcing and service packages to owner‑landlords in exchange for fees rather than holding large property portfolios. That is safer, but much harder: it demands real operational competence rather than marketing flair. For renters, the lesson is simple and stark: stability matters more than glossy branding. Can an industry rebuilt on management fees deliver the security tenants want? The answer will determine whether long‑term rental housing becomes a sustainable part of China’s urban ecosystem or remains a cautionary tale of a capital‑intensive boom gone bust.