China’s real estate slowdown is increasingly impacting property management companies, as falling fee collections from homeowners and developers create new challenges for the sector. 
Property service providers across the country are finding it harder to collect management fees, affecting their revenues and ability to maintain residential communities. In a weaker economic environment, some homeowners are unable to afford the charges, while others are deliberately withholding payments in an effort to negotiate lower fees. The trend has become particularly visible in residential developments with high vacancy levels, where owners of unused properties see little reason to continue paying maintenance costs. 
The situation has been further complicated by financially distressed developers, many of whom remain responsible for management fees on unsold apartments. China continues to grapple with a large inventory of unsold housing following years of rapid construction activity before the property market downturn that began in 2021. According to estimates by ANZ, the country's unsold housing stock covers a floor area roughly equivalent to twice the size of Greater London. 
Industry data highlights the scale of the challenge. Research firm CRIC reported that the average fee collection rate among China’s top 500 property management companies fell to 71% in 2025, compared to 89% in 2021. Industry executives indicated that 2025 saw the sharpest deterioration in collection rates, with conditions continuing to worsen since then. 
Speaking at a recent industry conference, He Shuhua, Chief Operating Officer of Onewo, which operates under the Vanke Service brand and is affiliated with state-backed developer China Vanke, stated that the broader property market slowdown had begun affecting the property management sector as well. He noted that falling home prices had altered homeowners’ expectations and that difficulties in collecting fees had become a widespread industry issue. 
Analysts believe the sector is entering a negative cycle. Lower collection rates are forcing property management companies to withdraw from an increasing number of projects, reducing service quality and raising concerns among residents and developers. As maintenance standards decline, property values may come under additional pressure, further reducing homeowners’ willingness to pay management charges. 
The issue is also creating challenges for local governments. In several communities, residents have reported problems such as uncollected waste, unattended security posts, malfunctioning elevators and poor lighting after management companies reduced services or exited projects. Authorities are increasingly being called upon to help maintain basic services and resolve disputes between homeowners and service providers. 
Sam Radwan, Chief Executive of real estate consultancy Enhance International, said the problem represents a significant and unusual aspect of China’s property crisis. He indicated that apartments in developments suffering from management deficiencies could lose as much as 25% of their value. He also pointed to broader challenges in the housing market, including oversupply, high vacancy rates, rising foreclosures and weakening demand. 
Residents in several cities are already experiencing the impact. In Qinhuangdao, homeowner Linda Cao said Vanke Service had informed residents that it would withdraw from managing her partly vacant residential compound after six years because fee collection levels had become unsustainable. According to Cao, many homeowners had stopped paying fees for nearly two years in an attempt to reduce monthly charges from 3.8 yuan per square metre to 2.4 yuan per square metre. She expressed concern that only weaker operators may be willing to take over the project and feared property prices could decline further. 
Vanke Service described project exits as normal business decisions and noted that it continues to expand into other service projects. 
A similar situation has emerged in Beijing, where resident Jenny Zhao said management company Shoukai Property is preparing to leave her residential compound after replacing another operator that exited in 2023 due to low fee collection rates. Zhao said the estate has already experienced weaker waste management, reduced security standards and deteriorating infrastructure, contributing to lower home values compared with nearby developments. 
The challenges come after years of rapid expansion by property management companies alongside developers during the housing boom. Data from the China Property Management Institute showed that the average area managed by the country’s top 100 property service firms increased from 9.8 million square metres in 2012 to around 71 million square metres in 2025. 
However, many companies are now scaling back operations. State-owned China Overseas Property withdrew from projects covering 55.6 million square metres in 2025, marking a 25% increase from the previous year. Meanwhile, the property management arm of Country Garden exited projects covering approximately 80 million square metres during the year. 
Smaller privately owned management firms are facing even greater difficulties. According to CRIC, many unlisted companies collect less than 65% of their fees. 
John Lam, Head of China and Hong Kong Property Research at UBS, said property management companies typically face negative cash flow once collection rates fall below 85%. He added that vacant properties and non-resident speculative investors have become major factors affecting revenue generation for management firms. 
Research conducted by Ant Group Research Institute and Xiamen University’s School of Economics found that nearly one-quarter of Chinese households owned at least two homes by the end of 2025, highlighting the extent of investment-driven ownership across the market. 
Industry executives also indicated that many property management firms now prefer exiting projects rather than pursuing lengthy legal disputes with homeowners over unpaid fees. While this approach helps limit financial losses, it often leaves residential communities struggling to secure replacement operators and maintain service standards. 
As disputes increase, local governments are becoming more involved. State media reported that at least five county-level administrations have issued directives encouraging public officials and Communist Party members to lead by example and pay management fees on time. In some cases, local authorities have reportedly prevented state-owned property managers from withdrawing after residents failed to appoint replacement operators within required notice periods. 
Industry participants noted that authorities are becoming increasingly concerned that unresolved service disruptions and community disputes could create broader social and governance challenges. 
Source Reuters