Would you still invest in real estate in Shanghai right now?

no, but only cuz i dunno **** about it, and i have something else to do w/ my BR.

altho i do know someone who's *pissed* uncle mao doesnt allow foreigners to buy anymore properties. else he would be purchasing more as we speak.

Yes, but it depends on location, location, location...

With such a large population, rapid urbanization and continued economic growth, real estate will remain lucrative for some time, however an vehicle of investment in China rapidly becomes a bubble because of the massive savings rate....

How does the tenure length work in China? Most building have a 50-75 year tenure length. What happens at the end of that period? Is the buildings owner obligated to extend that tenure length at no cost or a very low cost like in western countries?

Prices are crazy, rent is about 3% p.a. of the market price. Buying real estate in Shanghai is economical nonsense.

What happens at the end of that period?

L.M smartarse like you should know that NOBODY KNOWS IT YET

‘Uncle Mao’ will let you buy property IFF ( if and only if) you have been here more than a year on a Z visa with a residence permit. Without those 2 things you can take photos, send postcards home, leave to get a new visa and come back, but legally that is about it.

If you are going to hold for anything less than 3 years forget it. 5 would be better if you can stomach the wait; if the bubble breaks (and be very clear, it is a big bubble) then all hell is going to break loose. Take a look at the changes the government has recently made to stop run-away inflation and cool off the housing market. These rules can change in a moment’s notice.

Right now paying cash is the only way that makes sense to buy a house in Shanghai. But that also has its disadvantages because you could invest that money properly and make out much better. Houses are not all they are cracked up to be as far as a short term investment unless you rent it out and they pay for themselves. Then the more you have the better.
Use a 3,000,000 (3 million) rmb house as an example.... pay cash or mortage.

Pay cash and be done with it, forget about the money and live in the house, it is your home not an investment, you own it etc…. in 5 years time history says it will be worth more but may not have been an asset.

Can't pay cash but have 2 million and need to borrow 1 million...
After taxes of 5% (150,000) and real estate fees 2% (60,000) you are then hit with a 7% mortgage on the 1 million you borrowed. A 1,000,000 loan @ 7% will cost 6,000 per month in interest alone. You would pay 134,000 in interest after just 2 years. Total cash out the window is 334,000 (29,000 per month, I can rent something really nice for half that).

A 3 MIL house would have to increase more than 10% in value in two years just to break even, assuming the following:

You had the 2 million that you had to invest in your pillow and earn no return on it otherwise you lost an investment opportunity.

You had no maintenance cost or condo fees, unlikely.

Invest that 2 million wisely and get a conservative return of 10% annually (16,000 a month not even compounded, I could live on that alone if I had to) and you can quickly see that buying is not such a great deal AS AN investment, as a HOME that you OWN is a different story.


P.S. after 70 years the lease runs out and the land goes back to the goverment, the owner gets a thank you card in the mail and possibly can re-lease it. I'll let ya know in 55 years.

L.M. wrote:How does the tenure length work in China? Most building have a 50-75 year tenure length. What happens at the end of that period? Is the buildings owner obligated to extend that tenure length at no cost or a very low cost like in western countries?

There's no building in Shanghai that will last that long, so renewing a tenure shouoldn't be a worry.

You guys can continue your off topic flamewar in the PIT.

Michael wrote:You guys can continue your off topic flamewar in the PIT.

Duly noted master Yoda !

greenmark wrote:There's no building in Shanghai that will last that long, so renewing a tenure shouoldn't be a worry.

Yes, that's interesting... you mean like the lane houses you see in Shanghai that were built in the 1920's? Or the peace hotel, built in 1906. Or the... ok, perhaps you were mistaken

the thing is that what they used to built 100years ago and 50 years ago was meant to last for ever now they built houses to last 10 years 15 to 20 at most because they need to build again to make more money
this is money time now days not like before we use to built in for long time all thise old houses in europe are meant to last 100 years
before i canme back china 5 years ago i sold my house it was built in 1900 and it was in pretty good condition
now they built houses too quick with materials that are doutfull qualitywise you can see it every day in shanghai many people complain about it on this site they do it cheap not to last same as cars and there is a long long list of the same stuff not made to last nowdays

I think those lane houses were built by foreigners, probably not the actual labor, but the design and supervising of the construction I bet was not done by locals in the 1920's. There some nice old building in China though that were done by locals just not apartment buildings that will last.

And looking at some of the hosuing construction I would also bet they don't last 50 years never mind 70.

I may invest in a marble factory. Marbles are totally under rated, round smooth and pretty. I already have a list of what I will do when I'm rich

I may invest in a marble factory. Marbles are totally under rated, round smooth and pretty. I already have a list of what I will do when I'm rich