Summary of Key Points
Recently, there has been a nationwide trend of property management companies withdrawing from their operations: over 1,200 properties were deregistered in 2025, and another 400 disappeared in the first three months of 2026. The reasons include extremely low property management fees collection rates (the industry threshold is 80%, but the average for the top 500 companies is only 71%, with even lower rates for smaller firms), rising costs (with labor accounting for 53% of expenses), and meager profits (the net profit margin for the top 100 companies is merely 7.31%). Property owners have various reasons for not paying their fees: they feel it's a waste for vacant properties, the service quality is poor (e.g., no one fixes leaks), property prices have dropped but the fees haven't, or they see others not paying and follow suit. However, once the property management company leaves, the community becomes a "isolated island" with uncleaned garbage and malfunctioning access control systems, leading to falling rents and declining property values (for example, the price of properties in Nanjing's Crescent Lake Garden dropped by 25%). While owners save a few thousand in fees, they end up losing hundreds of thousands in their down payments. This deadlock is essentially due to the failure of the "expansion for profit" business model adopted by property management companies, disrupting the symbiotic relationship between them and the residents.
Why Are Property Management Companies Leaving?
Property management used to be a profitable industry: 18 companies went public in Hong Kong in 2019-2020, raising over ten billion yuan. But why are they leaving now? The key issue is an imbalance between income and expenses:
- Income: Fees are not being collected adequately. There is a critical threshold of 80% collection rates to cover basic operations (labor, elevator maintenance, cleaning, etc.). In 2025, the average collection rate for the top 500 companies nationwide was only 71%, and smaller firms typically had rates below 65%. For instance, at Guiyang Jiaojian Garden, out of 531 households, only 25 paid on time, forcing property manager Chen to cover the shortfall out of his own pocket for over a year before he could no longer afford it.
- Expenses: Costs are constantly rising. The operating costs for the top 100 companies increased by 4.53%, with labor accounting for 53.52% (salaries for cleaners and security guards). With revenues declining and expenses rising, profits are extremely thin (7.31% net profit margin), leaving them with no choice but to leave.
Why Don't Property Owners Pay Their Fees?
It's not that they don't want to pay; rather, they feel it's not worth it or they're angry:
- "I haven't received any services, so why should I pay?" Vacant property owners are especially aggrieved. For example, Zhou Jing in Suzhou only spends a few days a year at her home in Henan and refuses to pay the fees. Although the law doesn't allow refusal for vacant properties, she can't accept this.
- "The service is so poor, why should I pay?" Xu Zheyao's home was flooded with feces, and both the property management company and the developer shirked their responsibilities, leading to his refusal to pay. In Hangzhou, Ah Feng saw his property value halve, but the fee of 2.6 yuan per square meter remained unchanged, costing him nearly 4,000 yuan annually despite barely using community facilities like the gym or reading room, making him feel it's not worth it.
- "If no one else is paying, why should I?" In a resettlement area in Xu Zhou, Yao Yao found that only he was paying the fees while others enjoyed the benefits for free. This imbalance led to his refusal to pay as well.
- "The property management company leaves, and the community falls into disarray." After a property management company exits, problems such as uncleaned garbage and non-functional access control arise, leading to lower rents and declining property values (e.g., Nanjing's Crescent Lake Garden).
Do Owners Really Benefit from the Company Leaving?
Many owners think not paying fees is a good thing, but they end up suffering more:
- The community becomes a "isolated island": Six years after the departure of the property management company at Guangzhou Dongpingyuan, garbage blocked doors, access control failed, and delivery workers could enter freely. Rent rates were 10 yuan per square meter lower than in neighboring communities, with no tenants interested.
- Property prices plummet: At Nanjing's Crescent Lake Garden, rent prices dropped from 30,000 yuan to 24,000 yuan per square meter within half a year of the company leaving. An owner saved a few thousand in fees but lost hundreds of thousands in their down payment—a case of "saving a few pennies and losing a lot."
- Community cohesion is destroyed: When the property management company at Chengdu Tongrui Moonlight Lake was changed, the homeowners' committee improperly selected a company involved in legal disputes. In Shenzhen's Ideal Home, the committee director embezzled public funds (130,000 + 300,000 yuan), further exacerbating community governance issues.
How to Break This Deadlock?
Both property management companies and owners need to change their approaches:
- Property Management Companies: Stop focusing on expansion and return to providing quality services. They should repair streets and fix leaks promptly to show that the fees are worth paying for.
- Owners: View property management fees as a "maintenance fee" for the community. These fees are not just for the company but for maintaining the environment, elevators, and green spaces. Without payment, the community deteriorates, and property values decrease.
- Homeowners' Committees: Be transparent with the bidding process and public income (e.g., advertising revenue from elevators). Any secrecy will lead to even less trust and lower collection rates.
Conclusion: Who Really Owns the Community?
The widespread withdrawal of property management companies is not the end of the industry but the end of an era based on capital expansion. We need to return to a model that emphasizes service and collaborative governance. The community is the owners' home, and property management companies are their "butlers." The fees they collect are essential for maintaining its quality. If owners avoid paying, it will ultimately affect property values; if they shirk their responsibilities, it will backfire on them. When capital withdraws, residents must learn to manage their communities themselves. After all, a clean and well-maintained environment requires everyone's contribution.
(The entire analysis is written in plain language, without technical jargon, using real examples from the news to make it understandable even for non-financial professionals.)