The property market in Shanghai

New development continues apace, despite general market cooling measures.

8 April 2014, Words by Lucy Greenwood

 

In spite of cooling measures, the Shanghai market continues to record modest price growth. Both residential new build and resale prices achieved new highs in 2013.

New development continues apace. The city’s residential land market was extremely active in 
the second half of 2013, with competitive land auctions pushing prices to new records. Major developers such as Vanke, China Overseas, Greenland, Poly and Wanda were particularly active.

Small price falls have been recorded in the rental market, down 1.1% in the last half of 2013, which is the result of high supply.

With recent policy measures already factored into market dynamics, the government may need to announce further measures to send a signal to the market and rebalance its long-term direction. These potential new measures may include the reform of land supply and financial innovations, such 
as REITs.

In recent years there has been a trend for multinational corporations to seek ‘returnees’ for positions within Shanghai – Chinese nationals currently studying and/or working overseas who are looking to return to China. They are employees who have the benefit of Chinese citizenship, coupled with experience of living and working abroad, and are positioned for a much higher ‘success rate’ when settling into new roles.

It is a trend that is having a direct impact on real estate in the city. The property preference for these returnees tends to be for large units, as some secondees may have been accustomed to large homes while living overseas.

 
 

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