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On the mark home service for expats
July 8, 2010, Thursday
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Print Edition
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MAXVIEW Realty helps expats and multinational corporations find and rent new homes as easily and painlessly as possible by providing a one-stop solution for all expats' relocation needs.
Maxview Realty offers a full range of complimentary services, including city orientation, school search, 24/7 multilingual hotline, housekeeping and maintenance, visa and immigration services and tenancy management.
Market overview
Chinese mainland overtook Hong Kong as the world's hottest housing market in the first quarter of 2010, with prices rising at over double the rate of anywhere else, says Maxview.
With the lack of many alternative investment options in China, many high-end residential units have been used as a form of savings and are being left empty. This demand for housing as an investment vehicle has been competing with housing as a human need, leading to a scarcity of affordable housing.
To combat this, the government has recently introduced measures to cool the housing market, including:
Curbing loans on third home purchases;
Raising minimum mortgage rates;
Restricting pre-sales by developers;
Tightening down-payment requirements for second-home purchases.
The new measures are obviously working - property sales fell by 70 percent year-on-year in Shanghai in May and developers have delayed sales of new residences because the municipal government hasn't announced its property policy.
Only 46 of scheduled 96 developments were put on sale last month. In the high-end residential market, only 20 luxury units costing over 50,000 yuan (US$7,357) per square meter were sold in Shanghai during the first half of June, and 36 out of 45 luxury developments available for sale saw no sales at all during the same period.
This increased difficulty in buying and selling homes has led many to look to Shanghai's rental market instead, with the number of rental properties increasing by up to 20 percent and still rising.
Many landlords are trying to rent out their properties, as opposed to selling them, while potential buyers are holding off on purchases until (they believe) prices will fall, and renting houses in the meantime.
Occupancy up
Meanwhile, the ongoing World Expo has been bringing many expatriates and foreign companies into the city, looking to support the event and enter the Chinese market, pushing up occupancy in popular high-end compounds and leaving few vacancies.
This increased activity in the rental market pushed May's Shanghai Rental Property Index to 1,221, a rise of five points from April.
Unlike many other large cities in China, Shanghai has yet to release detailed guidelines on implementing national policies, leaving many to take a "wait and see" attitude. For now, uncertainty means greatly reduced sales and many are waiting to see the guidelines in more detail before making any major decisions.
The China Banking Regulatory Commission will continue to tighten lending, especially to high-risk sectors such as the property market, making it more difficult to buy properties and pushing more people to rent.
Some analysts see the "bubble" in China's property market bursting very soon, with prices set to fall as much as 20 percent in the next 12 to 18 months. The ratio of housing prices to disposable income in Beijing and Shanghai is 13 to 14 times and many see this as unsustainable in the long-term, although the leasing market should continue to remain steady.
While many multinational companies reduced expat relocation to China during the financial crisis of the past two years, the twin factors of increasing expat relocation to Shanghai and the World Expo mean the high-end residential leasing market will remain hot for some time to come, with high occupancy rates and fewer vacancies than ever, especially in Jinqiao, Pudong and expat-friendly compounds in Puxi, which currently have an occupancy rate of almost 95 percent.
This increasing demand has already pushed the high-end residential leasing market into an upturn and this will continue.
For more detailed analysis, contact Tony Huang at tony.huang@maxviewrealty.com or by calling 3251-8500. You can also check out Maxview Realty's website at www.maxviewrealty.com
Maxview Realty offers a full range of complimentary services, including city orientation, school search, 24/7 multilingual hotline, housekeeping and maintenance, visa and immigration services and tenancy management.
Market overview
Chinese mainland overtook Hong Kong as the world's hottest housing market in the first quarter of 2010, with prices rising at over double the rate of anywhere else, says Maxview.
With the lack of many alternative investment options in China, many high-end residential units have been used as a form of savings and are being left empty. This demand for housing as an investment vehicle has been competing with housing as a human need, leading to a scarcity of affordable housing.
To combat this, the government has recently introduced measures to cool the housing market, including:
Curbing loans on third home purchases;
Raising minimum mortgage rates;
Restricting pre-sales by developers;
Tightening down-payment requirements for second-home purchases.
The new measures are obviously working - property sales fell by 70 percent year-on-year in Shanghai in May and developers have delayed sales of new residences because the municipal government hasn't announced its property policy.
Only 46 of scheduled 96 developments were put on sale last month. In the high-end residential market, only 20 luxury units costing over 50,000 yuan (US$7,357) per square meter were sold in Shanghai during the first half of June, and 36 out of 45 luxury developments available for sale saw no sales at all during the same period.
This increased difficulty in buying and selling homes has led many to look to Shanghai's rental market instead, with the number of rental properties increasing by up to 20 percent and still rising.
Many landlords are trying to rent out their properties, as opposed to selling them, while potential buyers are holding off on purchases until (they believe) prices will fall, and renting houses in the meantime.
Occupancy up
Meanwhile, the ongoing World Expo has been bringing many expatriates and foreign companies into the city, looking to support the event and enter the Chinese market, pushing up occupancy in popular high-end compounds and leaving few vacancies.
This increased activity in the rental market pushed May's Shanghai Rental Property Index to 1,221, a rise of five points from April.
Unlike many other large cities in China, Shanghai has yet to release detailed guidelines on implementing national policies, leaving many to take a "wait and see" attitude. For now, uncertainty means greatly reduced sales and many are waiting to see the guidelines in more detail before making any major decisions.
The China Banking Regulatory Commission will continue to tighten lending, especially to high-risk sectors such as the property market, making it more difficult to buy properties and pushing more people to rent.
Some analysts see the "bubble" in China's property market bursting very soon, with prices set to fall as much as 20 percent in the next 12 to 18 months. The ratio of housing prices to disposable income in Beijing and Shanghai is 13 to 14 times and many see this as unsustainable in the long-term, although the leasing market should continue to remain steady.
While many multinational companies reduced expat relocation to China during the financial crisis of the past two years, the twin factors of increasing expat relocation to Shanghai and the World Expo mean the high-end residential leasing market will remain hot for some time to come, with high occupancy rates and fewer vacancies than ever, especially in Jinqiao, Pudong and expat-friendly compounds in Puxi, which currently have an occupancy rate of almost 95 percent.
This increasing demand has already pushed the high-end residential leasing market into an upturn and this will continue.
For more detailed analysis, contact Tony Huang at tony.huang@maxviewrealty.com or by calling 3251-8500. You can also check out Maxview Realty's website at www.maxviewrealty.com
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