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It is approaching the three year anniversary of my purchase of my current house at Vanke Waltz Garden. I have been paying the mortgage of the house for three years and have lived in the house for two years. During the three years, the real estate market in Shanghai changed dramatically and affected millions of people. The current status of the market is still confusing - the house price is still rising like a rocket, while the voice of the bubble theory is becoming stronger day by day. It is a good time to take a look at the houses in Shanghai by reviewing the three years we went along.
Why I bought this House
Many people commented on the house and asked why I bought this house. "I am interested in why you chose to move to Vanke's Waltz Garden: what attracted you to the place?"
Well. I chose the house by a simple reason - I love the Real Estate Developer - Vanke. The Vanke group is the largest real estate developer in China. Vanke is a magic word for me. It has turned many county areas into beautiful town house.
At the time I bought the house in early 1999, the average price per sq. meter is about 3000 RMB. Typical apartment is from 90 - 120 sq. meters in Shanghai. That made the total price to be 300,000 RMB or 36,000 USD. It was a huge number already. However, the Vanke house was priced higher. The 5000 RMB per sq. m is even higher than the adjacent properties.
Good Deal
Looking back, it turned out to be a good deal. The price for the houses has almost doubled in three years. Now it is almost impossible to buy any house within the inner ring less than 7000 RMB per sq. m.
Xiao Qu
"I understand that Vanke's Waltz Garden is also called a new "xiao qu" or "she qu"? Are these very popular housing options in Shanghai now?" - Mr. Pow from Singapore.
Yes. It is called Xiao Qu or Community in English. It is almost the only option in Shanghai. Currently, the real estate market works this way in Shanghai:
So there is no separated house. Actually houses (one building with only one family living in it) are no longer allowed to be built within the outer ring road of Shanghai. The new apartment buildings have to be either 7-stories without elevator or higher with elevator.
So, several buildings will make up a community. The community is typically maintained by a Property Management Company. The Property Management Company charges people living in the community for their service (say, 1.95 RMB per sq. m per month)
It is the Seller's Market
As I described in my previous blog Hard to Buy a House in Shanghai, it is absolutely a seller's market. To be more precious, it is the investor's market.
There is a very strange phenomena in Shanghai that people with money cannot get a chance to buy an apartment. This is out of everyone's imagination - so wired.
When a real estate project is completed and open to market, buyers with cash in hand only find out that all the apartments have been sold out. After looking for bigger houses for some days, I am disappointed myself. If you hear about a place that sounds good, you don't even need to bother to call their sales hotline. The answer will be: "Sorry. All the apartments have been sold out".
What? All apartments have been sold out? It is astonishing to see the newly opened houses with at least 1000 apartments were sold out in two hours. Am I dreaming? Unfortunately, it is the reality of the market in Shanghai.
Currently, Medias in Shanghai begin to notice the phenomena. I have seen new apartments in Xuhui that they following the N-N-N policy: "No Price. No Reception. No Apartment." They even don't bother to talk to the end customers.
When I steps in to the sales office of a property in Yuanshen Rd. and Pudian Rd., I saw the even stranger notice. "Our apartment price is confidential. If you want to get noticed of the price, please pay 2000 RMB first." Well. Well. Well. They asked me to pay 2000 RMB to know the price of their houses? Is this robbery?
When my friend said "The service I received to buy a house is worse than that I received to buy a cloth", we all laughed out laud. True. Very True.
Where are the Houses
The big question in everyone’s brain is, WHERE ARE THE HOUSES?
The recently three years witness the blooming of the real estate industry. The price of houses in Shanghai doubled. The market strategy for real estate companies made the price for the house keep raising. For example, the property at Jinxiu Rd. rose from 6000 RMB per sq. m to 7200 RMB per sq. m in the last month (from Sept to Oct, 2003). So it is a good investment option to buy one or two apartments and sell it in one or two months. Now the magic Chinese "Relationship" or Guanxi come into play. If there are new houses, buyers will typically buy the houses using internal channels before they are released to the market. This is proved by the phenomena that second-hand new houses are available on Real Estate Agencies while the first hand new houses are not available from the Real Estate Developers.
Bubble!!
I believe this is the typical economy bubble in the real estate industry. People buying the houses not for use, they just buy it for investment. When the majority of the buyers become investors, it is for sure the price will drop after they find out there are not enough buyers.
However, I do believe with more and more people moving to Shanghai - from worldwide or from country-wide, the demands for houses are still high. The prices will continue to rise after it drops for about one or two years.
Posted by Jian Shuo Wang at October 29, 2003 8:48 PM
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and this link: http://home.wangjianshuo.com/archives/20031029_houses_in_shanghai.htm
Hi, come here and take it a look - something unbelievable is happening in Shanghai!
Posted by: Jian Shuo Wang (external link) on October 29, 2003 7:09 PMXiao Wang:
Now I know your feeling is conplex, on one hand you expect the price holds on that would ensure your living house hovering, on the other you anticipate that bubble will burst with a short term and after you bought a new big house by favorable price it recover and soar again in sharp V shape ! That is typical feeling surfaced after they got some sweet thing, they need more and more, endless frustration. Do you remember the tale of "Gold Fish and Fisherman" ?
Perhaps it's more appropriate to say that many buyers hold properties for speculation, not investment, purposes.
Bubbles burst when most people no longer fear that they'll burst. Would you be interested in devising a "fear scale", Jian Shuo? :)
Posted by: WilliamW on October 30, 2003 11:54 AMremember the HK property tragedy? something in preview
Posted by: tutu (external link) on October 30, 2003 2:08 PMTutu, maybe. However, Shanghai's economy status is still better than Hongkong of that time.
Posted by: Jian Shuo Wang (external link) on October 30, 2003 10:02 PMIs there other choice for young professional beside buying an apartment? Can these people find a good place to rent in downtown area or even in some really nice neighborhood (such as The French Consession)? I expect that you can find a place that was overlook (apartment in old building , garage or unuse part of a house) and renovate it to make it a nice livable place.Do you think it is possible?
Posted by: Karp on October 31, 2003 1:37 AMIt is definitely possible for young professionals to rent an apartment. Actually, most people will choose this option in the first three years after they begin to work. However, it is almost impossible to find a good place with nice neighborhood - the apartment in old building - it will be labelled with a super high price.
A normal house with garden in downtown Shanghai costs about serveral hundred million RMB. What do you think it will cost to rent a room in it?
Posted by: Jian Shuo Wang (external link) on November 1, 2003 7:45 PMIs there a way to work around that situation?
I know that in big city ( Paris,New York ) this same kind of problem result in many interesting way. The room ( for rent )becomes very small - as little as 10 sq.m or less per room was rent to single person ,luckily it has it own very small w.c. ,or people start to broadeen there look to a different kind of place to live ,such as an old factory,old office space,shophouse.
I've been walking through the French Conssesion and surrounded area I notice that apart from the old houses that worth millions of R.M.B.,there are also manys that look a bit neglected (or you can say it look poor),quite small and not fully used,that the kind of the old building I'm talking about.
I suggest that readers who have experienced the kind of bubble-burst cycle will recount the bursts in pasts. Shanghai is no exception and will follow. My call is 2010. We can map out several scenarios that watch them take place...
Posted by: FFTB on November 5, 2003 11:24 AMI AM VERY INTEREST IN YOUR TOPIC ABOUT THE RESIDENTIAL HOUSING IN SHANGHAI, CHINA. COULD YOU GIVE SOMETHING INFORMATION ABOUT WHEN THE PEOPLE BUY NEW HOUSE HOW THEY PAY FOR THE HOUSE, WHAT KIND OF MORTGAGE THEY USED?
Posted by: Lin wang on February 5, 2004 8:20 AMI shot your website by chance. Very interesting topics. I am wondering how did you manage to get the old flat you mentioned, which rent only 600RMB per month? Because I am considering to go to Shanghai to start my career. Also I am wondering whether there's any studio in downtown shanghai, like less than 50m.square? Thanks a lot!
Posted by: Jolie on May 3, 2004 10:22 PMI guess the best measurement on how soon the bubble will burst is to look at affordability in general. If we compare with the situation now in Hongkong (where the property bubble is believed to have been "bursted" already), we may draw some interesting conclusion.
A fresh college graduate in Hongkong earns an average of RMB 10,000 a month and a typical apartment in Hongkong (perhaps 70 sq meters - much smaller than in Shanghai as people there are used to smaller space !) costs around RMB 2.5 million and thus it is 250 times monthly salary ! If we look at Shanghai, the price for a 90 sq meters apartment is say around RMB 600,000 and if we assume the salary for a fresh graduate to be around RMB 4,000 per month, it is only around 150 times.
It is clear that we are far from a bubble burst. If we take the Hongkong examplpe, price can go up at least another 100% !
Thank you for such a wonderful blog!! You provide such many vivid details of life in Shanghai. :) I like your writing style very much: clean, concise and straightforward.
Just one small suggestion. As far as I know in American English, Ke4 ting1 in English is "living-room", not "guest room". Guest room actually means one extra bedroom which is not in use most of the time and is saved for stay-over guest.
I was looking for the "guest room" and could not find it...
Hello,
We have house and land for sale in a new estate in Australia.
Properties are located on the Gold Coast and areavailable for foreigners to buy. Prices start at Australia$350,000.
Seeking agents who would like to work with us and refer buyers for these properties. We offer attractive commission to successful agents.
Please contact Gerry on this email address: gerryt@langrealty.com.au
I have a house located in lane 606 Huan Hai Middle road, near Xin Tian Di(about 10 min walk). It was built in 1930s, my parents have refurbished recently. 1 garden 1 dinning room 1 kitchen and 1 bathroom on the ground floor;1 small room and 1 big room and 1 bathroom on the first floor(2);1 small room and 1 big room with showeroom 1 balocony and 1 roof garden on the second floor (3).
i am now in Exeter, UK. if u interested in it, u can e-mail me, henrysyzhou@hotmail.com or call my parents 0086-13916601035 my dad's mobile,please speak english slowly for him,cheers
Attention : cheaper apartment for sale in One Park Avenue
located at Xin Zha Rd and Chang De Rd ,
3 bedroom, 2 bathroom ,
131Sqm,
price is RMB2.7M
new renovation,high floor with good view ,10 minutes to JingAn Temple Station,
new clud Gym,and indoor Swimming pool.the rental is above USD1800
the price is cheaper than any other
pls contant quantangsky@yahoo.com.cn
Posted by: Arman on August 22, 2005 4:17 PMsee the price list from http://www.homes-cn.com
Posted by: kelo (external link) on December 29, 2005 9:53 PMI have a department for leasing, which is located in Jingan district, near Najing Road, Shanghai, named Shanghai First Block.
The department is well decorated and the completion of construction is one year before. There are two bed rooms and one living room, 27th floor of 34, with a good view of East Pearl. The building is located nearby the Shanghai TV Station.
I have taken a lot of photos of the buildings and my department. If you want to rent, you can contact me for the detailed information. I am not an agent. My email is elementsservice@hotmail.com, and my contact telephone no. is 13621842841.
I am thinking buying a small vacation condo in Shanghai, any suggestion?
Posted by: Ruey on November 13, 2006 8:06 AMWhat is the average price for a 3 bedroom condo in Shanghai? How much do foreigners usually pay for such a condo unit, and do we have to pay a higher price than people in China?
Posted by: Jayne on November 13, 2006 10:38 AMreally good website, i find many thing usuful here!
Posted by: cityhome (external link) on February 26, 2007 9:58 PMI AM ITALIAN, I HAVE A NICE FLAT AND I WANT TO RENT ONE SINGLE ROOM TO A CHINESE SPEAKING PERSON.
MY WISH IS TO SPEAK SOME CHINESE WITH MY ROOMATE, SO I CAN IMPROVE MY POOR CHINESE!
The single room is to male or female no problem, 1400RMB + EXPENSES TO SHARE.
Location: Liuzhou lu - Yishan lu.
18floor,simple flat,extremely silent,in very convenient area: 20min walk to metro 3 Yishan Lu, 5min walk to bus stop (lines 830,93,205,732,909,931,89 to Xujiahui, Jinan Temple & more), 10min walk to shoppin road Tianlindong lu + TrustMart.
PLEASE PHONE TO 13774221367,
OR WRITE TO accossi@gmail.com
plz can you plz give me the prices of building you have in china for sale,i need one building to buy,
Jamie from UK
Goodday ,
I am looking for your co-operation in building a Tourist Hotel or Real Estate in your country. I am sorry if this is not in line with your business.I need an experienced person like you to assist me to set up , develop the project and assume responsibility of ownership as chairman but will be bringing in profit /distribute profit monthly or annually,am the minister of Agriculture in my country i just want this to be a secret deal between us.
However ,I got your email information on internet. your immediate reply will be highly appreciated and I shall give you more information on this project.Please contact me at my private email: (dr01martins@yahoo.com)
Thanks and God bless.
Dr martins
Goodday ,
I am looking for your co-operation in building a Tourist Hotel or Real Estate in your country. I am sorry if this is not in line with your business.I need an experienced person like you to assist me to set up , develop the project and assume responsibility of ownership as chairman but will be bringing in profit /distribute profit monthly or annually,am the minister of Agriculture in my country i need this project urgently,i just want this to be a secret deal between us without my country knowing it.
However ,I got your email information on internet. your immediate reply will be highly appreciated and I shall give you more information on this project.Please contact me at my private email: (dr01martins@yahoo.com)
Thanks and God bless.
Dr martins
First professional Property website for expats in China
have you heard about it before?
come in and have a look， there is a lot of info
Posted by: leo (external link) on March 16, 2008 2:12 PM