Hi,
My Shanghainese fiance and I (both mid-20s) are looking to relocate to Shanghai within the next year or two, and having done our sums we're looking to buy a 2-bed flat not too far out of town (her parents live near Yangpu District, so ideally somewhere there or nearby, perhaps Hongkou). However, feeling-out the housing market from here in the UK isn't an easy task, so was hoping to get some pointers on the basics if anyone can help!

My fiance's parents have found a place for 2.5million RMB (that they'd like us to take, as it's right near them!). But we'd prefer to spend a bit less if possible, maybe under 2 million. Is that viable nowadays? (for a 2-bed in or around Yangpu). 2nd-hand would be acceptable.

Finding info online is tough; I've managed to hit one property website (thanks to it being bilingual): "Shanghai Villable". Does anyone know anything about this one? Is it legit & kept up-to-date? My fiance's parents aren't exactly web-savvy, but they reckon websites always stick prices which lower than the real price on property websites (maybe minus 10%). Is this the case? Is this something we can factor-in when looking? Or is it just not worth bothering to look at these?

If anyone knows of any other good property sites (similar to the above one or otherwise) that'd be extremely useful. Or if anyone has a better tactics for distant house-searching, would love to hear. Obviously it's not ideal doing it from the UK, and we're going to be over at the end of August for a few weeks, but would rather do some of the ground work from here if possible.

Another factor I've been warned about by the soon-to-be-in-laws is that some areas aren't so modern and 'Westerner-friendly' than others. Is this true? And would it be likely to cause any problems if we lived there?

Finally, on the more mundane side... how easy/difficult is it to sell a place second-hand? We're certainly not expecting to turn a profit, and no-one can predict the markets these days, but are we likely to lose a lot after say 5/10 years? Will we even be able to sell 2nd-hand?

Sorry for the long list of questions... a lot to ask from a newb... but you're my only hope!

Its a tough one. You will get a lot of varied feedback. When you get married here, a house has to go with the deal. My real estate friends will not like me for saying this but: My personal opinion, for what its worth, is that Shanghai real estate is very expensive. We could easily afford to buy, but we just don't see the upside and we are watching what happens when bubbles collapse in the US. Not to say that there are not good deals out there. You might find someone with a property who is motivated to sell and needs the cash right now. However, this kind of find, takes a lot of looking around. I am sure the in-laws have other viewpoints.

I personally would not consider buying anything until you arrive here and can look first hand. I would count on taking your time and renting for a few months while you look around. In spite of any pressure you get from the family, you should get here first and take your time. You won't find any good deals online on any site in English. You might find some OK rentals. You need to build some relationship with one or more agents that specialize in the areas you want to live. They will usually come up with good deals for they make it to the website listings.

It's overpriced right now. And as Mike said, if this is YOUR first time in Shanghai, you may want to feel things out first. This place isn't for everyone.

Also, who owns? You or your fiancee? Or their parents? Just like overseas, if you go the loan route, you may need to prove that you have viable income. It was easier a few years ago when we bought, as the whole place was panicking and prices were down. Nowadays, they're up again (though stabling off). If it's in her name, make sure you'll be with her for awhile. Not saying that to be sarcastic. I'm saying that to be realistic.

Good luck regardless.

as a foreigner, you may not be eligible to buy a property at all before meeting certain conditions.

Also, you may need to think of the marital property issue also. You don't want to put your money here and then a few years later leave China with two empty hands.

As to property price, residential property is widely seen as overpriced a lot. However, even under current tight curbs on property market by governments, property price has showed little fall at all, esp in downtown shanghai (within the middle ring). Prices have even gone up in the past July in some cities. You just cannot know where the property market will get.

According to Knight Frank, property prices in Shanghai are forecast to drop by 15 percent on average in the second half of this year so don't be in too much of a rush to buy. Also they say the number of "unsold, developer-owned homes" in the city will jump by 90 percent by the end of the year, so lots of choice.

Humac wrote:According to Knight Frank, property prices in Shanghai are forecast to drop by 15 percent on average in the second half of this year so don't be in too much of a rush to buy.

It's already August, let's see if he is right. I say not.
2nd 3rd tier China cities, property price has been firm and up, but sales volume dropped.

For Shanghai, high-end properties won't drop.
Low-end to mid-range will be like other 2nd 3rd tier cities.

fWerrF wrote:

Humac wrote:According to Knight Frank, property prices in Shanghai are forecast to drop by 15 percent on average in the second half of this year so don't be in too much of a rush to buy.

It's already August, let's see if he is right. I say not.
2nd 3rd tier China cities, property price has been firm and up, but sales volume dropped.

For Shanghai, high-end properties won't drop.
Low-end to mid-range will be like other 2nd 3rd tier cities.

Don't shoot the messenger.
http://www.shanghaidaily.com/article/?i ... e=Business

Humac wrote:Don't shoot the messenger.
http://www.shanghaidaily.com/article/?i ... e=Business

I won't

I have some data in hand on the current market, I will compare with the data at the year end.

Yo Adrienne..Where do you think the market is going.....You already know What I think...

do you think the market will really go down 15%? its seems for a long time now they having been saying its gona crash.

The bubble is gonna burst.....I think on certain properties you have two years before the bubble burst.....

Chinese property market has humiliated a number of economists who had made prediction about the price fall in the market. It has been going up all the way. Even at this moment, latest data showed that property prices regained its way of rise in the past July.

It WILL burst, but when. Largely depends on the skills of central government of managing the economy.

A bellweater for some of the buzz in chinese circles are the infamous wenzhou real estate investors. They own a good chunk of the empty flats you see in major compounds. Rumor has in one circle that they are in selling mode in Shanghai and putting money into US real estate as it bottoms. One story in local friend circles is that one investor has a started to liquidate his Shanghai real estate holdings (some in the building of the person this story is coming from) at 10% below market rate. All rumors of course, but once any news has made the headlines, its already old news to savvy investors.

Doroto wrote:Chinese property market has humiliated a number of economists who had made prediction about the price fall in the market. It has been going up all the way. Even at this moment, latest data showed that property prices regained its way of rise in the past July.

It WILL burst, but when. Largely depends on the skills of central government of managing the economy.

Up all the way? Not really...

SHANGHAI'S house price index fell for the second straight month in July with 90 percent of the areas monitored recording price drops.
The index, which tracks price fluctuations of existing homes across the city, lost 14 points, or 0.53 percent, to 2,551 last month, the Shanghai Existing House Index Office said yesterday.

And isn't central government trying to stop prices rising? I thought that's what all the tightening of the economy was about? But I'm no economist, humilated or otherwise.

I love it when people talk about making a few million on their property.

"Have you sold it yet and counted the cash?"

"uh..no"

"Then you haven't made anything. You are still just paying rent to the bank"

Chinese property market has humiliated a number of economists who had made prediction about the price fall in the market.

So did the US market. Until it dropped like a rock.

"If I had only held onto that house for another 3 years.. I would have made...." - hindsight is so easy.

Michael wrote:A bellweater for some of the buzz in chinese circles are the infamous wenzhou real estate investors. They own a good chunk of the empty flats you see in major compounds. Rumor has in one circle that they are in selling mode in Shanghai and putting money into US real estate as it bottoms. One story in local friend circles is that one investor has a started to liquidate his Shanghai real estate holdings (some in the building of the person this story is coming from) at 10% below market rate. All rumors of course, but once any news has made the headlines, its already old news to savvy investors.

Entering USA market, NOW??
The "real" playas from China, were buying Manhattan real estate, not by units, but by buildings and blocks, in 2009 already. Whoever going there now, is too late.

Michael wrote:So did the US market. Until it dropped like a rock.

Depends on where.
The desirable area barely dropped.
Shanghai city center, especial high-end units, will be the same.

fWerrF wrote:

Michael wrote:A bellweater for some of the buzz in chinese circles are the infamous wenzhou real estate investors. They own a good chunk of the empty flats you see in major compounds. Rumor has in one circle that they are in selling mode in Shanghai and putting money into US real estate as it bottoms. One story in local friend circles is that one investor has a started to liquidate his Shanghai real estate holdings (some in the building of the person this story is coming from) at 10% below market rate. All rumors of course, but once any news has made the headlines, its already old news to savvy investors.

Entering USA market, NOW??
The "real" playas from China, were buying Manhattan real estate, not by units, but by buildings and blocks, in 2009 already. Whoever going there now, is too late.

Yeah, a lot of foreign funds snapped up the distressed residential in hot US areas - gonna see the same sort of story with commercial in the US as lease terms roll and vacancy rockets. China is a different beast though - you can build a fancy financial model to value real estate assets in the US, but how do you value a unit which sits empty in a prime Shanghai location... it has zero cash flow and is depreciating? Tangible real estate shouldn't be an asset class which shows +20% volatility...

As for the US, I would say its time to start looking at some of the homebuilders... out of them all, DR Horton is most likely best of breed. Big cash position, they bought up cheap land when their competitors where watching paint dry, and they have a huge tax asset.

Chinese real estate scares the crap out of me...