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dutchshanghainese
Squeeker
Joined: Aug 09, 2005
Posts: 16
Status: Offline
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 Posted:
Nov 03, 2005 - 02:59 PM |
 
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| Post subject: Buying an apartement in LianYang (Pudong) |
I am about to accept a position in Shanghai and was considering buying an apartement here, since that seems more attractive to me than leasing one. After a search of areas LianYang seems most attractive to me and my girlfriend. Plan to stay in SH ~5yrs from Jan 1st onwards.
Anyone has experience buying a place in Shanghai? Any good advices for offices/agents or reviews of the available complexes from people that live there?
Thanks! |
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shanghaiceltic
Board Royalty
Joined: Sep 20, 2005
Posts: 7625
Location: Perth WA
Status: Offline
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Nov 04, 2005 - 08:44 AM |
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I bought my own house here 4 years ago. Then a foreigner could not have his name on the house certificate, now you can. However that said it as it was a new house we bought the development company reccommended we apply to Industrial & Commercial Bank (ICBC) and we did. The loan came through very quickly. Odd I could apply for a loan but not have my name on the docs. It was put in my wifes name and later when the law changed we changed the docs.
We had to find 30% deposit. The other down side was that we payed over all the money to the development company and it was a year wait before we could move in. During that year we had to pay the mortgage. So we were paying mortgage and rent. Luckily the company carried on paying the rent until we moved in.
Most houses/apartments here if bought new have to be totally decorated. You get bare walls, bare floors and minimum of wiring and plumbing. Even that wiring and plumbing had to be ripped out and replaced.
A better option might be to buy a place that has been previously owned. It will come decorated and fitted out. Though some of the interiors here that I have seen are just over the top. If you can get hold of a copy of That Shanghai, Shanghai Life (freebies available at all good pubs) or the Shanghai Daily there are adverts for property agents who do sell. Expect to pay anything from RMB7,000-25,000/m2 depending on area. When I bought my gaff it was only RMB3,700/m2
As all the documents and contracts will be in Chinese you might need the help of a translator, certianly get a lawyer to look at the contracts. The law on house salesand conveyancing here is somewhat grey and not developed.
That said I am happy owning my own house here. I have no trouble with landlords as such. |
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sinned69
SuperStar
Joined: Sep 01, 2004
Posts: 1512
Location: China, Middle East, Asia Pacific
Status: Offline
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Nov 04, 2005 - 09:07 AM |
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it would be worth your while hanging on for a bit as the property market has ballooooooned out and burst or is still in the slow meltdown stage. theres been some interesting articles concerning the state of the real estate market in shanghai. i think it was in one of the magazines... like "thats shanghai" "SH" "CITY WEEKEND" or the "Shanghai Daily" sorry i can't recall which one. however the opinion is that property prices are falling having reached their unsustainable peak earlier this year. certainly the local governments move in changing the regulations concerning loans and mortgages played a substantial part in modifying a somewhat overzelous and overheated market. now its the cooling period.
so wait around abit, too let things cool even further, and allow yourself to get a sense and feel of the market, the locations that might best fit your situation, and also it can be well worth the wait when you realise just how changeable things can be here. the laws and regulations are in a constant rate of flux.
thats my yi kuais worth  |
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qing nin shao deng |
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dutchshanghainese
Squeeker
Joined: Aug 09, 2005
Posts: 16
Status: Offline
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Feb 24, 2006 - 12:31 AM |
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Found a rental in YanLord Town for the moment, so I am in the area! Brand new place, comes with ok renovation and management and quality seems good. Indeed waiting for prices to stabilize again in Q2 and will see where I am going to buy. Some Phase 2-s will be opened too, so a new supply of appartments will help to sink prices here as well.
Living in the area now for 2 months and I must say pretty convenient. All facilities close (Carrefour / Haoledi / Restaurants) and 20 min door-to-door from Nanjing Rd. |
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peterpaul
Barker
Joined: Jan 27, 2004
Posts: 169
Status: Offline
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Feb 24, 2006 - 08:41 AM |
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I would not bet on those apartments sinking if they have been pre-sold. A lot of people are in denial that there is a long, slow, and steady decline in mid to high end property in Shanghai (aside from very limited options such as Lane houses and park views). When HK tanked in '97 very few sold at first...
Turnover of apartments is far lower than it used to be and average prices have been sinking. Best to wait as long as you can. It ain't going up anytime soon (short of some more manipulative hanky panky).
Check this bit of writing out from Andy Xie, the rent a quoter from Morgan Stanley
¡°I missed Shanghai. I just bought in Beijing,¡± Sue declared to me.
¡°Don¡¯t worry. I will sell in 2008,¡± she said defensively, before I could comment on her decision.
Sue is an overseas Chinese in the financial industry. Like all Chinese, Sue loves properties and is always talking about her properties in exotic places.
Shanghai¡¯s star is clearly down among the moneyed people. Even though they own multiple properties in Shanghai, it is not fashionable to talk about it anymore. Beijing is still fashionable. At least, one can talk about owning a place to stay during the 2008 Olympics. It sounds so cool.
It seems that everyone has the same view about Beijing property: buy now and sell in 2008. Beijing sold 25.7mn sq m of residential properties in the primary market last year, doubling sales of 11.3mn in 2001. Buyers like Sue have been a main driver of the market¡¯s growth.
Some have even been buying in Shenzhen. But, it is not fashionable to talk about it. Ten years ago, many Hong Kong people bought in Shenzhen, believing that Shenzhen property prices, less than 10% of Hong Kong then, would converge towards Hong Kong¡¯s. It dropped instead. It is embarrassing to talk about trying again.
Property is the main show in this cycle. Overseas Chinese like Sue have played a decisive role in hot markets like Beijing and Shanghai. The two cities accounted for one third of the primary residential sales in value in 2004; Guangdong, Jiangsu and Zhejiang, the other three prosperous coastal provinces accounted for 27%. These provinces are closely tied with China¡¯s export sector, which overseas Chinese dominate.
China¡¯s income distribution is highly skewed. Some government agencies acknowledge that China¡¯s Ginni coefficient is over 0.4. Private estimates are much higher. A recent study by Boston Consulting claims that 0.6% of households own 60% of the private wealth. Such data suggest that the size of China¡¯s population who can afford cars and properties is relatively small.
This is where overseas Chinese like Sue come in. There are about 60 million overseas Chinese in Hong Kong, Taiwan, Southeast Asia and North America. They have GDP equivalent to about US$1.1 trillion or half of China¡¯s. There are probably more overseas Chinese able to afford properties in Beijing and Shanghai than locals.
This is why property advertisements usually show up in airline magazines on flights between Hong Kong and Chinese cities, or on billboards from airports to downtown hotels. This is why, if local people are bullish, they talk about the potential demand from people like Sue.
¡°We are an international financial center. Lots of foreigners will have to come to buy,¡± one Shanghai speculator who could not unload his property mentioned to me over the Chinese New Year.
But, overseas Chinese believe that the case for the rising property price is that local people have a lot of money, and that they are being smart by front-running the locals.
China¡¯s property market seems to thrive on two mindsets crossing over each other. As long as there is enough liquidity to satisfy both beliefs, it doesn¡¯t matter.
I hope Sue sells in 2007. It would be a crowded trade to sell in 2008. However, there is a technical barrier. The developer will not give her the ownership certificate until the compound is fully developed. Sue will get the certificate only in late 2007. I think the developer doesn¡¯t want people like Sue competing against it in the market.
There are many Beijing property owners in Sue¡¯s situation. Wall Street has an opportunity to create a swap market for proud Beijing property owners to trade without ownership certificates. Maybe, these properties could be packaged together and listed in Hong Kong. |
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shanghaimonica1984
Squeeker
Joined: Feb 14, 2006
Posts: 19
Status: Offline
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Feb 28, 2006 - 01:21 PM |
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It’s kinda hard for a foreigner to relocate here, especially since there is no centralized rental information exchange website. If communication is a problem, that’s even more difficult. To save the pain in the ass, you can try some apartment searching agents, tell them your requirements, they will look for the apartment for you and take you to view the apartment.
For your reference, there is one agency focusing on foreign customers only - www.XPShanghai.com. I think it will offer some help for easy relocation |
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yu888
Board Deity
Joined: Jan 25, 2003
Posts: 18054
Location: ZhongShanParkArea SH
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Feb 28, 2006 - 03:16 PM |
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I purchased my home here in 2004. Best choice since I have no landlord issues, and I had the place remodeled to the specifications I wanted. My place was second hand so I left some stuff but redid whatt I did not like. So far as the drop in value or whatever, if you plan to live in it for awhile, or keep the property for a longer term , these short term movements in price do not affect you.
Have been managing family's different properties here in SH for the past years and have found it is well worth it as well. With prices dropping now though, you should wait as long a you can to see if you can squeeze in some extra savings
Anyhow, my two-cents is that it is still worthwhile to buy for the longer term.
Cheers. |
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Thoughts & updates about Shanghai On my Blog for more details:Random Thoughts about Living in Shanghai...and more |
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hammerforlife
Fire-eater
Joined: May 24, 2004
Posts: 2701
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Feb 28, 2006 - 05:50 PM |
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Interesting posts as I am looking to buy an apartment at some point. Just wondering what the "right price" for housing is in Shanghai, perhaps comparing it to other major asian cities. Obviously Hong Kong is higher due to land pressures (and higher wages). But I have no idea about property prices in Bangkok, KL etc. |
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edbreejen
Raver
Joined: Apr 24, 2003
Posts: 432
Location: Shanghai, Zhongshan park area
Status: Offline
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Feb 28, 2006 - 08:50 PM |
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Bought an apartment in SH in 2001 when prices were still around RMB 3,500/sqm. Had to pay only 10% deposit and got a <4% mortgage on it. Property was on my wife's name, as this was not yet possible then. On these conditions buying was definitely better than rental, however some comments.
- Don't forget the 'hidden costs' of ownership such as 'share' in periodical painting & maintenance of the building
- 'Service fees' (get a good specification)
- Parking costs often included in the rental but not in the ownership (up to RMB 1,200-1,500/month)
PS bought our house 2nd hand (3 years old) and decorated (only had to spend another RMB 20K on furniture and audiovisuals and the house was ready) directly from the owner, no agent involved...it also an option.
Prices are going down and will go up someday later, so pick your moment. |
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IrinaBill
Seeker
Joined: July 15, 2004
Posts: 62
Status: Offline
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Mar 01, 2006 - 08:30 AM |
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A 3 million rmb apt rents for 8500 per month. Why own? The return is terrible. Its a bet that prices will rise, if you are confident they will then thats another story but I would wait. Predicting the price of Shanghai real estate or for any China real estate is akin to choosing a specific stock. Living in a propoerty that you own for 10 - 20 years is also different, you build equity instead of paying rent but 5 years? And even if you do make a profit its not just a matter of telling a Chinese bank to convert that kwai to USD and transfer it to my local savings and loan in Nebraska. When an investor looks at investing in a business the #1 thing on their mind is "whats my exit plan" You should be thinking the same way before plunking down your hard earned money. |
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peterpaul
Barker
Joined: Jan 27, 2004
Posts: 169
Status: Offline
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Mar 01, 2006 - 10:57 AM |
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Definitely look at the exit plan. Do you really want to be crossing the Shenzhen border with dollars/Euros taped to your body? Several times at that? Or paying out the nose for transfer fees at Western Union, which you would have to do several times to get the cash out? (After the loss in converting the money from rmb to dollar/euro).
In general I believe that owning is better than renting in the long term. However, I do have several caveats about owning in Shanghai.
1. You do not own, you only rent, and the history of the locality is known for sudden seizures of land (ask the expats in '50 or the locals in '60).
2. How long are you going to be here? Two or three years is not long term.
3. Housing prices, outside of rarities you probably are not looking at, will not be going up. There is a massive amount of apartments in the high end that were bought on speculation (just look at all the darkened apartments in tony districts) and a lot more of this coming on line in the next year or two. These prices will have to come down because I truely believe the market was supported largely by specs trying to "front run the locals" and not the locals. The speculators are in denial but will start to unload if interest rates rise or they finally admit they bought a losing investment (hard for some to know when to fold, especially if you are a ABC dentist in Taipei and are playing with a good chunk of your savings...)
All in all I think most are better off renting here. The prices are not likely to rise, you can negotiate sweetheart rentals if you know how to play hardball, and this place has a horrible track record. Just think if it is tough in the upswing how will this place be in a good downturn? |
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bobbycharlton
Talker
Joined: Feb 23, 2006
Posts: 108
Status: Offline
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Mar 01, 2006 - 11:12 AM |
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hammerforlife
Fire-eater
Joined: May 24, 2004
Posts: 2701
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Mar 01, 2006 - 11:23 AM |
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Yes it is. peterpaul and IrinaBill have both made very relevant points both about the currency issues and the state of the market, which have been clearly driven by speculators, particularly in the more central areas. I think that both these issues will work themselves out in the end and the currency will probably become freely tradable ay some point but unless someone has a 5-10 year plan or preferably longer, then buying generally may not be the best option at the moment. |
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yu888
Board Deity
Joined: Jan 25, 2003
Posts: 18054
Location: ZhongShanParkArea SH
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Mar 01, 2006 - 04:42 PM |
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Yes, I agree that those who are more risk adverse should think long and hard about whatt you do NOT know about this market before deciding to buy. It is a matter of how much confidence, however misplaced or correct as it may be, one has on the growth of Shanghai as a market and an economy. Housing is currently overprice with a govt that is committed to making slower growth the priority. With a high occupany rate, rents can be really cheap.
What does this mean? It means one needs o look at the most basic of needs when buying a place. The MOST convenient places with teh right amenities will be the ones that have the highest demand regardless of market conditions. Good location is key to a populace that is commuting by foot, bike and public transit. Keep this in mind.
My criteria are:
1) inside the inner ring road. yes a bit pricey but there is only so much space available for developement in town
2) Apartments above 18 floors- new developements no longer can exceed 18 floors so higher floor units will be limited
3) Good access to Public transit - my units all have over 10 bus routes and at least 2 metro lines within a 10 min walk, and also highway entrance within 10 mins drive.
The rest of my criteria are less critical ...
4) Units with 2 bathrooms minimum
5) Units with more spacious kitchens, preferable open style or partially
6) Hi Utility rate (over 72% of actual space is usable)
Using this as my original guideline, I have found that despite a 25% drop in values in the past few months in my area (ChangNing DIstrict) My property is still (18 mos later) over 50% higher than what it was at when I bought. Timing was part of it but the amount mine dropped inthe same period was less than 13% as compared to the average. |
_________________
Thoughts & updates about Shanghai On my Blog for more details:Random Thoughts about Living in Shanghai...and more |
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