China’s prolonged property downturn is now extending into the property services industry, with management firms struggling to collect fees from homeowners and increasingly withdrawing from residential developments.
Industry data from China Real Estate Corporation (CRIC) shows a significant deterioration in payment compliance across the sector.
The average collection rate among China’s top 500 property management firms fell to 71 per cent last year, down from 89 per cent in 2021. While full annual breakdowns were not released, industry participants say 2025 saw the sharpest deterioration, with the trend continuing to worsen.
The decline is being driven by a combination of weaker household finances, changing attitudes toward housing costs, and the ongoing impact of falling property values.
Reuters reported that some homeowners are withholding payments in an attempt to pressure management companies to reduce fees, while others are simply unable or unwilling to maintain payments on assets that have declined in value.
Developers are also adding pressure to the system, with unsold units in partially occupied developments still generating fee obligations that weigh on service providers. At the same time, rising vacancy rates across many cities are reducing the financial viability of ongoing estate management contracts.
As financial stress builds, some property service firms are withdrawing from projects, leaving residential communities facing reduced services such as security coverage, waste collection, and general maintenance. These exits further complicate already strained local housing environments.
Industry executives say the sector is increasingly feeling the spillover effects of the broader property slump.
“Risks from the broader real estate slowdown are spilling over into the property management industry,” said He Shuhua, chief operating officer of Onewo, the property services arm of state-backed developer China Vanke.
He added that “falling home prices have changed homeowners’ expectations,” noting that “difficulties in collecting fees is a common problem across the industry.”
The combination of weaker collections and rising withdrawals is creating a feedback loop: lower service levels can place further pressure on property values, which in turn reduces homeowners’ willingness to pay management fees, deepening financial stress for operators.
Analysts say the sector is now grappling with a structural shift as China’s housing market cools after years of rapid expansion.
Property management firms that grew quickly during the boom are now adjusting to lower revenue certainty, higher vacancy, and more fragmented payment behaviour across developments.
Local authorities are also becoming more involved as disputes emerge between residents and service providers, particularly in cases where firms attempt to exit contracts without replacement operators in place.
In some jurisdictions, officials have stepped in to encourage timely payment of management fees in order to maintain basic services and community stability.