Archive for Developements

Sales up, but prices way, way down.

Aiya! 
Is what most landlords, and agents are thinking these days.
A conversation during a pokergame (chinese poker, somewhat different) last week revealed to me what many were actually thinking.

Why the hell does this U.S. Financial thingy affect us so bad?

I think an answer to this actually requires more insight and general knowledge about the economic  links between the countries than I can offer.
So I will resist the tempation in trying so here.

..but! I can give you some hints that i got yesterday…. 

Further down the poker conversation, I found out that many of the big companies actually had a fantastic November.
Dooioo beating them all with more than a hundred luxury real estate sales. 21st Century, and Hope all did well too. 

Very revealing to me was that my friend at Dooioo actually told me that all of the sales were real bargains, and somehow almost everyone of the sellers actually was either a foreigner with loan, overseas chinese with a loan, or a chinese working overseas with loan.
All of them sold way under price (sometimes 30% off), and usually jumped on the first offer they got.

It just shows how interlinked markets worldwide are right now, and america’s worst bear market since the great depression (see chart from barry ritholtz blog here), or potentially the worst ever is getting under the skins off landlords on this side of the pacific too.

And with no end insight, i’m sure I’ll be blogging about more.

If you remember one of the earlier posts this summer I actually pointed out that there are units in one Park Avenue available at 35 and one even at 32k a square meter, which was roughly 25% of it’s spring prices.
Everybody thought that’s it, how much further could it go?
Now there is a unit available selling at just 28′000.

It’s a drastic image, and it’s the same in many other compounds where there is a lot of foreign ownership.

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Shanghai’s Spider Web project: 22 Metro Lines

Shanghai’s future Spider Web project: 22 Metro Lines.
If you thought Shanghai already had a large Subway System you’ll like it even more until 2020.
Summa Summarum, there are 22 Lines planned to open for shanghai’s commuters by the year 2020.

What are the most noteworthy extensions and new lines?
The Number 2 Line will be directly connected to the Pudong International Airport and Pudong’s Railway Station (if you wondered, yes, there is one, very, very far away, on land that wasn’t shanghai 20 years ago).

The Best Part of the Line 2 extension that is scheduled to be completed by 2010? To the South it will also be connected to the Hongqiao International Airport (as will line 10), which means that if you mixed up your departing Airport and still have a little time left there is a good chance that you’d still catch your flight by hopping in the Train and taking it all the way in the other direction.

I know many of our customers like to take trips to islands and quiet places nearby the city. 
From next ‘09 it will be very convenient to go for a beach trip to Chongming Island if you’ll live along the No. 9 Subway Line. 
The Line will be the world’s longest subway line and connect a historic town in the south, the University Town of Songjiang, Jiu Ting, the Water Town of Qibao, Many of the Manufacturers around Guilin Road, Ikea, Xujiahui, Xintiandi, the Expo Site, Century Avenue, Jin Qiao and Chongming Island.

Xintiandi will benefit from the urban planning as 7 new stations are being built around the popular shopping and entertainment center.

After years of neglect, Gubei one of the cities most developed and popular areas will be connected by Line 10 and 16.

All in all Shanghai will have the world’s largest subway line, and I think we will see a lot of urbanization and real estate developments in the area’s around Chongming.

Maybe Shanghai will become a lot like New York and the U.S. where most people will commute from the suburbs into the city every day.
Downtown Shanghai will become more luxury oriented, more commercial than residential.

An indication that this is the trend are google searches for Songjiang Housing Price’s and Kang Cheng Houses
(a compound in Songjiang Districts) are exploding lately.

Check it out here at google insights

Even with the current downwards trend, it’s unlikely prices will fall enough so that ordinary office workers can buy any of the places downtown.
Most of them are also dreaming of a car, new gadgets and are therefore not willing to spend all of their lifesavings in a home like their parents did.
And it seems like Shanghai’s outer districts will become a lot more interesting for first timers as they can reach almost everywhere from anywhere.

 

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Latest noteworthy Transactions

Well, there hasn’t been many.
An Apartment sold in the Upper Eastside by a bank auction. The previous Owner was related to the pension scandal earlier last year and was indebted for about 3.5 Million Yuan.
The roughly 146 sqm Apartment sold for about  6 Million or 42k a square meter before taxes.
Quite a hassle to go through but the price is well below the usual 50-60′000 Rmb other sellers are asking for in Xujiahui’s most exclusive Residential Club. 

Another Oriental Manhattan Apartment is for sale at 29′000 Rmb a square meter, which is not as low as the 27′000 Rmb but still about 20% less than the asking prices were 1 year ago.

Despite all the chao’s Mansions’ and Villa’s in the French Concession seem to hold up.
At least for now.

Quite stunning was that even amidst the Chaos the Mansion on Gao’an Road sold for 80 Million Rmb or roughly a 100k Rmb per square Meter.
Or about half this price if you count the 1000 square meter garden as area too.
Additional Information and pictures to the House here in one of our previous ads for the property.

A few larger French Concession Villa’s have sold in the same price per square meter range but where considerably smaller.
1 Went on YongfuRoad for abouts 23 Million, 2 million less than it’s original asking price of 25 Million Rmb.
And also a little more than a 100k Rmb per square meter.
An Anfu Road Mansion near Changshu Road sold late August for 36 Million Rmb, it had an area of about 395 square meters, putting the price per square meter at about 90′000 Rmb.

A savvy Investor bought an historic Villa on Wukang Road with huge Yard by buying out three families for a combined price of 33 Million Yuan or about 50k a square meter.
A Hell of a deal.

Prices have come down quite a bit on Tianshan Road, First Phase Oasis Riviera has units for sale between 19 and 23k A square meter,  which is about 15% less than 6 months ago.
Yet next door Yanlord’s prices have changed little and apartments are still in low supply.

New Developements near Yanggao Road are selling for as low as 9000 Rmb a square meter and have drawn a lot of interest.
Apartments have been sold but generally people are still having a wait and see attitude.

Download the whole list of sales in the Puxi Area from us here 

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Davos Economic forum votes Shanghai most desirable city to invest

During the World Economic Forum,  Shanghai has been voted the world’s most attractive global city in the future in a survey by the greater Paris investment agency.
China’s largest City not only by population, enjoys the biggest investor confidence followed by Beijing, Mumbai and Dubai.

The President of the Commitee Thierry Jacquillat said it was the first such survey to include cities from emerging markets as China, Brazil and India.

The survey wad based on opinions of more than 500 business leaders of multinational companies interviewed in 22 countries.

Many see Pudong as the future of Shanghai and value this “plot of land” as one of the city’s most attractive places for property investment.

Lujiazui has already been present in headlines lately as the World Financial Center Inaugurated August 28, 2008 has opened it’s curtains to the world.
The 101 Storey building has an occupancy rate of roughly 50% so far.
The 492m Skyscraper is currently the third tallest in the world (and tallest in China) and will still be topped by nearly 150mby the Shanghai Center which is scheduled to complete in 2013.
Knowing how they build in Shanghai (faster than light), I’m having guess we’ll beat that too! 

According to Forbes the City will be amongst the biggest in the world by 2025 in terms of Population.
Shanghai Ranks 9th, with an estimated growth rate of 1.44% and a 19.4 Million large Population by 2025 compared to 14.5 Million in 2007. 

The Future holds a lot for Shanghai and it’s Real Estate Market, luckily, we’re here to report the process.

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