China’s Property Service Sector Grapples with Plummeting Fee Collections
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China's Property Service Sector Grapples with Plummeting Fee Collections
- The average collection rate for China's top 500 property firms dropped significantly to 71% last year from 89% in 2021, highlighting severe financial strain.
- He Shuhua, Chief Operating Officer of Onewo, a property management unit of state-backed China Vanke, stated that falling home prices have changed homeowners' expectations, making fee collection a common industry problem.
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China’s prolonged real estate downturn is increasingly impacting the nation’s property service providers, who are struggling to collect management fees from homeowners. This struggle threatens their revenue and property values across the country.
In a weakened economic environment, many homeowners are either unable to afford their management fees or are deliberately withholding payments to pressure companies for price reductions. Additionally, some individuals who invested in multiple apartments before the property bubble burst around 2021 now see little incentive to pay administrative costs for assets that have declined in value. This situation has led to a sharp decline in fee collection rates, with industry executives noting that 2025 recorded the steepest drop, a trend that has continued to worsen.
The consequences of these uncollected fees are severe. Property management firms are increasingly abandoning projects, leaving residential communities to contend with deteriorating infrastructure, uncollected waste, and unstaffed security posts. This creates a detrimental cycle where lower service levels further erode property values and homeowners’ willingness to pay, with some analysts estimating that apartments in deficiently managed compounds could lose up to 25% of their value.
Companies like Vanke Property’s Xuzhou subsidiary, for instance, announced