China's sky-high apartment prices and its footloose generation of millennials are fuelling demand for rental apartments, driving investment by foreign private equity funds and Chinese real estate developers.

The country has been a home-owner’s market since opening up to the outside world in the 1980s and China’s home ownership ratio is now one of the highest in the world at about 90 per cent. But that is beginning to change as home price gains far outpace income growth,…