China's Property Firms Shift to Elderly Care and Pet Services Amid Housing Crisis

Adapting to a New Reality: Property Management Firms Explore New Income Streams

As China's real estate market continues to face challenges, property management firms are finding innovative ways to generate revenue. The ongoing downturn in property prices has led to a shift in homeowner expectations, with many demanding fee cuts or reduced payments. In response, property managers are expanding their services beyond traditional roles, exploring new areas such as elderly care and pet services.

A recent example from Wuhan highlights how property managers are going above and beyond. A manager looked after a family's pet chickens while they were away, feeding them, moving them to an air-conditioned room when signs of heatstroke appeared, and even calming them down during fights. The family expressed their gratitude by presenting the manager with a banner of appreciation. This case illustrates how some property managers are adapting to a changing environment where growth is no longer guaranteed.

Analysts suggest that this strategy is not only a response to sector-wide pressure but also a proactive move to capture new market opportunities. Yan Yuejin, deputy head of the Shanghai-based E-House China Research and Development Institute, emphasized that traditional property management fees have limited growth potential, while rising labor costs are pushing companies to seek alternative profit streams through value-added services.

Growth Trends in Property Management Revenue

Despite the challenges, the property management sector has seen some growth. According to CRIC Property Management, the research and data services arm of China Real Estate Information Corporation (CRIC), the total revenue from the top 500 property managers grew by 3.7% to 595.4 billion yuan (US$83.6 billion) in 2024. This contrasts sharply with the 22% growth recorded in 2021, when China implemented the "three red lines" policy to curb excessive borrowing by real estate developers and deflate the housing bubble.

In 2024, developers completed a total of 740 million square metres (7.9 billion sq ft) of floor space, representing a 28% decrease compared to the previous year, according to the National Bureau of Statistics. By the end of last year, the top 500 property managers in China managed a total of 19.3 billion square metres of floor space, marking a 5% increase from the previous year and over 10% more than in 2021.

However, falling property prices have led to a decline in homeowners' willingness to pay management fees. In 2024, 74% of property owners, including those managing apartments, shops, and parks, paid management fees, compared to 89% in 2021. Many property managers have ended their service contracts due to demands for lower fees, making it difficult for them to operate profitably.

Diversifying Services to Meet New Demands

With traditional fees proving insufficient, property management firms are turning to new markets. CRIC Property Management highlighted that services focused on the elderly and pet owners could provide structural opportunities. By offering these services, firms can build their competitiveness while creating customer demand and establishing a strong market reputation.

China's aging population presents a significant opportunity. It is estimated that over 30% of the total population will be aged 60 and above by 2035. In Shanghai, where 37.6% of residents with permanent household registration were aged 60 and above by the end of 2024, nine districts launched a pilot program in April encouraging property managers to explore elderly care services. Some offered services such as 5 yuan for a single grocery shopping trip, 15 yuan a month for rubbish disposal, and 150 yuan every time an elderly person was accompanied to the doctor.

The pet ownership trend is also growing rapidly. By 2024, the pet population in China's urban areas reached 120 million, with the dog and cat consumption market exceeding 300 billion yuan, according to a Goldman Sachs report. The number of pets in China had surpassed the number of children under the age of four, highlighting the increasing importance of pet-related services.

Of the top 30 property managers in China, more than half had explored pet-related services. About 43% provided boarding services, 23% offered pet healthcare, and 13% provided grooming services. These services not only cater to the growing pet population but also offer additional revenue streams for property management firms.

In August, a video of a security guard in Zhengzhou walking a dog for a resident went viral on Douyin. One comment under the video read, "Only this level of property management would make me willing to pay the management fees." This sentiment reflects the changing expectations of homeowners, who are increasingly looking for added value in their property management services.

As the real estate market continues to evolve, property management firms must remain agile and innovative. By diversifying their services and embracing new opportunities, they can not only survive but thrive in a challenging environment.