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Rents fall 15% as number of expats seeking homes drops

RENTALS for high-end apartments, including serviced apartments, have fallen by as much as 15 percent in some parts of the city.

Rents in Lujiazui, Xintiandi and Jing'an, three traditional areas for high-end apartments, are seeing cuts of between 10 percent and 15 percent compared to a year earlier, according to the latest research by Century 21 China Real Estate.

"While leasing demand jumped by some 30 percent in Lujiazui area during the post-holiday period, the number of overseas clients we've received has declined very rapidly," said Yang Lei, manager at a Century 21 branch on Dongchang Road in Pudong. "Most of our tenants are now targeting mid-to-low level houses."

Industry insiders said that they'd been expecting rent reductions of up to 15 percent at some high-end projects along the Huangpu River where a 250-square-meter apartment could fetch 50,000 yuan (US$7,320) a month a year ago. On the Puxi side, rents for high-end apartments in Xintiandi and northern Jing'an area have also fallen significantly.

"Large flats in the area suffered the biggest drops - between 10 percent and 15 percent - in rents amid flabby demand from overseas clients," said Li Wenlong, a Century 21 branch manager in Jing'an District. "For example, a 176-square-meter apartment at One Park Avenue now asks around 15,500 yuan per month as compared to 18,000 yuan a year earlier.''

Meanwhile, serviced apartments, mainly leased to business executives from multinational corporations, also became less expensive.

The latest research conducted by E-House (China) Holdings Ltd showed that of 77 serviced apartment projects in five districts - Jing'an, Huangpu, Luwan, Changning and Xuhui - 16 had cut their asking price by more than 10 percent.

Of those offering apartments with a monthly rent of more than 30,000 yuan, some 23 percent had cut rents by more than 10 percent, according to E-House research.

Tighter budgets coupled with fewer expats has led to lackluster demand. Rentals in Lujiazui and Xintiandi area led all decliners in the city in January, down 3.5 percent and 3.3 percent, the city's second-hand home rental index compiler said.


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