Prices for apartments and villas have risen an average of 30% per year – even more in the ex-pat areas of Jinqiao, Gubei, and Hongqiao. Since the advent of the global economic crisis, prices have not fallen – in fact, their levels have increased due to the Universal Expo. All experts agree that China, especially Shanghai, has a real state bubble.
Demand for living quarters in Shanghai will continue to be strong, given the lure of doing business in China by foreign corporations and due to the incessant Chinese spirit of using property investments as their preferred form of savings. In addition, the supply of new apartments and villas is not keeping pace with the demand.
A recent trip to Gubei illustrated this demand: groups of at least 20 real estate agents were located at the gates outside of Mandarine City and the Mandarine City Gardens – they were escorting prospective buyers to see properties or were handing out flyers with the latest rental or sales prices. It was noted that one apartment that was offered for 2.8 million RMB six months ago now commands 3.3 million.
In Pudong, at the intersection of Chengshan Road and Jinxiu Road, there are real estate agents occupying each of the four corners with tables or bulletin boards, and others simply passing out flyers to passers-by.
Possible reasons for this resumed price increase in properties are:
- The government has loosened its guidelines for loans and mortgages. In addition, many of the restrictions for obtaining loans for second and third homes or apartments have vanished.
- Statements by the Central Government that a strong real estate market is in the best interest of the country.
- Expectations of continuing higher inflation rates in China.
- Prices for new properties in the ex-pat areas range from 21,000 to 45,000 RMB per square meter.
Ease of Finding New Apartments or Houses
Expats can still find living space in Shanghai, although they might have to settle for older properties rather than new buildings since demand is stronger than supply. Read this Guide’s other sections on “Finding a Home,” Renting in Shanghai,” or “Buying in Shanghai.”