Archive for Market News
Shanghai Real Estate prices have popped 20,000 the 20,000 Renminbi per square meter for the first time.
In the last week Shanghai’s average price per square meter has hit 20,826 Renminbi per square meter.
A magic mark, having hovered around 19000 Renminbi for a long time this year, and during the 2007 high.
Transaction volume decreased around 25% in the week from rising 5% the week earlier.
Total transaction was 296,000 square meters.
Shanghai Budget Housing launched
Shanghai has opened the run on the first 7200 units of it’s budget housing project.
The Apartment’s located in Jiading, Songjiang and Minhang which offer 70%ownership and cannot be sold wihtin 5 years, will sell for under 5000 Rmb per square meter.
The run on the properties have been big, but the rules are strict;
each applicant must hold a shanghainese houshold certificate for longer than 7 years, and must have lived in the district of application for at least 5 years (means the registered address from what I understand), the household average maximum income per head is no more than 27600 Rmb, and their assets are not to exceed 70,000 Rmb (per head).
and other criteria…
The properties limits are also set according to each household’s unique setting, say a family with a child younger than 8 years old is to apply for the 61sqm unit.
Developer demands VIP card to see model room
What the Property Community names as the most “NIU” (sort of means “able”) developer in town has asked people interested in buying their product (villa’s) averaged at 17000 Rmb per sqm to first buy a VIP card for 300′000 Rmb. Or they won’t be shown anything in the compound!
The approach seems to bear fruit, the development has already transacted more than 90 Million RMB worth and it hasn’t even officially opened yet!
After holding the seasons villa’s for many years Li Ka Shing’s property arm has started pre-selling seasons villa’s online.
28 of the 141 Villa’s for sale have already been sold (at a 77907 RMB per square meter average) and it seems like they’re just warming up for when the properties are officially rolled out into the market once the renovations finish.
The Online sales report a total of 43 units sold already and Li Ka Shing seems to trade property for cash having not bought another block of land since last year.
Other property investors coming under pressure through the recent record acquisitions will likely keep a close eye on Li.
Is it a smart move?
First of all, would you want to bet against the richest chinese man alive?
For that you have to know what he’s betting on.
Does he think the shanghai market is overheated and is thus, withdrawing funds?
Li has been known for his shrewd timing more than for taking risks.
Or, is he simply doing good business elsewhere?
Hutchinson has immense operations throughout the country with countless developements and affiliations.
More than once were people trying to figure out what they’re up to next only to find out once the deal is done.
Transaction volume was down 5.8% last month but is still multiple times that of last year and supply is still not enough to relax buyers in premium areas just yet.
The market has moved up for the past 10 months and it may do so for a little longer but it seems like the craze created by the massive influx of funds has started to slow down and things are normalizing again.
I know better than calling wolf again, chinese buyers will continue to move for property and a big downturn in the likes of vegas or miami are unlikely but the shanghainese property investors may soon turn to their hold, wait and see mode once again.
Shanghais Holiday property fair which was held for 4 days during the holiday has received downpayments for 1379 Apartments totaling a transaction volume worth 2.23 Billion Rmb.
The average price per square meters of the “sold” properties was roughly 20′000 Rmb a significant rise to the 12000 Rmb average price of last years fair.
The fair who nets a commission on places sold, was also more successful than the may fair who sold 1103 Apartments.
Shanghai’s Green Land Group has undermined once again they are the kings of the cities real estate deals.
They have bought 1960 Long Hua Road (Xuhui District) lot for 7.245 Billion Rmb (27231 Rmb per sqm) more than double the current per square meter price of the area (average for apartments, not land).
The Area around 1960 Long Hua Road is under heavy construction and close to Xujiahui and the Huangpu River (the expo site is about 20 minutes away).
It’s a strategic water front area and reports hint that the group plans to built smaller apartments for the growing middle class in the city.
So, I thought about this a long time, because it didn’t make any sense.
I tried to explain, and yet, still, it didn’t make any sense.
Places rent fast these days, even quicker than last year, and there isn’t a lot of desirable properties available, at least in the French Concession.
I guess it’s fear, now for the first time, renters actually are forced to negotiate harder, and have more confidence to do so, Landlords hear bad news all around, and though it may be one of their first visitors that take the place they are willing to accept offers way below last years price.
There are still bidding wars, but they usually start way below and still end up below the last rental.
I think it’s a healthy adjustment, it gets people to move out of several reasons.
Some couldn’t get their current place down to a rent they find fair in the current market condition, and some just found out about the great deals available now.
These are some of the latest official numbers from the Shanghai Real Estate Market.
As of March 30th there were 18771 residential properties for rent in Shanghai, representing a total area of 2.5 Million square meters.
There are 99338 residential properties for sale (11 Million sqm), out of which 47523 qualify as ordinary residential properties (these properties are less expensive and smaller, and they only require a 20% downpayment).
In the last week of March 58 Units of Yanlord Town were sold at an average of 33323 Rmb per square meter in the Huamu Area of Pudong.
Shimao Sheshan Villa
Shanghai’s Sheshan Shimao Country Club Developement just broke the news that they completed the sale of two villa’s.
One of the two sets a new record as most expensive personal residence in China. It set it’s buyer back for a hefty 205 Million Rmb or about 30 Million US$. The other smaller unit sold also cost an impressive 155 Million Rmb.
Though these are china’s most expensive residences buy total price, it’s actually very “cheap” if you think about it in per square meter price.
The bigger unit is about 26400 Square meters large which puts the per square meter price at only 7700 Rmb.
Now that’s a real bargain considering many of the downtowns luxury residences commanding as much as 120′000 per square meter.
Also, the latest statistics also report a 38% spike in transaction volume, though I doubt that’s the market recovering, I’m glad to have some good news in all this turmoil.
For luxury properties this number is actually even higher, 45% for the month and 72% ytd.
Check out the official Shimao Sheshan Villa Website. 40 Acre Domiciles in Shanghai sound like a way to live!
Shanghai’s market is a truly funny (ironic) place.
The Market has followed the global downwards trend lately, more leases are broken by leaving expatriates and those whose companies just can’t afford it anymore.
From my observation the places hit the hardest are the Qingpu, Pudong and Gubei Villa areas.
My theory is that this is mainly related to which industries have been hit the hardest in the probably first contraction of the global economy in about a century.
You have to know the demographics of the expats staying in these areas, they’re mainly families (whose packages tend to be higher) with the working part of the houshold being in the manufacturing industry.
With the global demand for chinese exports diminishing the need for qualified “overseers” is too.
Companies are cutting down the workforce and shutting down factories and quality control centers.
The communities in the villa areas of Qingpu, Gubei and Pudong area built along these factories and therefore are more vulnerable to the kind of downturn we experience at the moment.
Downtown isn’t exactly immune to it, but so far it has weathered the crisis far better than other spots in the city.
There is a lot of people out there looking for deals, and trust me, there area lots.
But these deals tend to be in the smaller property range (usually 1 bedrooms) of which are more available.
There is a strange drought on historic places that are larger than 2 bedrooms and baths.
A lack of supply we didn’t even expect in the best of times.
I think this is because the companies and expatriates working in the industries directly related to chinas internal economy are still doing well.
Or are at least not experiencing a signifacnt fall in sales and profits.
As more chinese who are also affected by the export downturn are starting to cut down on spending and become more frugal this might change though.
You can already tell by the many empty shops in the downtown area that aren’t picked up as fast anymore that people are struggling here too.
Time will tell, and Shrealestate is here to document it
The new 7 Year “Shanghai Citizenship” law has taken effect.
There are millions of immigrant workers in Shanghai, many of them unregistered.
Why did they choose not to register?
Well, some of it has to do with laziness, but to the more affluent it’s the social care and taxes.
See, if you register, and have an income, you get taxed here.
But before, your tax didn’t really benefit you, your benefits are in your hometown, where your houshold registry is (hukou ben they call it in chinese).
So, why pay for other people’s social care?
This has changed, to incourage more talent to come to the city, Shanghai with arguably the best social system in China has taken an important step with the 7 year rule.
If you’re a qualified “talent” in the shanghai workforce for 7 years you can apply to have your household registry moved to Shanghai.
This move was largely influenced and advocated for by the in ‘08 newly created Shanghai Real Estate Commitee.