Expats looking to rent an apartment might find this article from Shanghai Daily today (Feb 17) interesting.
http://www.shanghaidaily.com/sp/article ... 391250.htm

roger that

rents for units that go for under ~7k-rmb are probably unaffected.

Yes it's not uniform across all price segments for obvious reasons. Many expats sent home were sent home because their packages were expensive and so it follows they were in the higher end of the rental market which now suffers from over supply.

Indeed, the article is about "high-end" apartments.

most expats have also asked to put rental at higher lvl and thus the actual rental paid hardly falls. eg a place is offered for cny5000. ur budget is cny15000. so u are likely to rent it without bargaining and would tell the landlord to make the fa piao out at 15000. thats another reason why lower end rental doesnt fall much

When you are spending money that isn't your own there isn't as much reason to negotiate prices. You do stupid things like tell the agent you have a RMB12000/month housing allowance and oddly enough the real estate agent only has places that rent for about that price available to show you. Not just rent. Schools too.

well most expats i come across dont seem to realise that they can rent cheaper than the budget and pocket the difference

BitterExpat wrote:When you are spending money that isn't your own there isn't as much reason to negotiate prices. You do stupid things like tell the agent you have a RMB12000/month housing allowance and oddly enough the real estate agent only has places that rent for about that price available to show you. Not just rent. Schools too.

Totally agree. I had idiots that did that. Fired everyone of them there and then. The next one I told to find me a 10,000 RMB apartment for 3,000 RMB or she would be fired too. Need to be hard with these people otherwise they will treat you like mugs

That's what i'm hoping. I have been looking for 20-25k apartment (>240sqm) in Yanlord Riverside Garden when most of the landlord r asking for 30-35k. I believe the rental market will still fall even though the stock market has been up since this year.

kumlong wrote:well most expats i come across dont seem to realise that they can rent cheaper than the budget and pocket the difference

well you can do that if the company has such a policy (some do), otherwise pocketing the difference would be fraud - meaning a potentially serious shortening of your stay if HR come looking for a way to cut their expat bills and send some people home without severance pay

Amen. My company insists we use their assigned agent (who knew the budget is without my telling him). We know we are being ripped off but can do nothing.
And the landlord hates the agent too because he demands a month (or if feeling generous 1/2 month) just to renew the damned contract each year.
And the agent's fee has to be paid in cash with no receipt.....

You should be able to renew the contract directly with your landlord and not have to go through the agent except for the first time.

Shangstar wrote:

BitterExpat wrote:When you are spending money that isn't your own there isn't as much reason to negotiate prices. You do stupid things like tell the agent you have a RMB12000/month housing allowance and oddly enough the real estate agent only has places that rent for about that price available to show you. Not just rent. Schools too.

Totally agree. I had idiots that did that. Fired everyone of them there and then. The next one I told to find me a 10,000 RMB apartment for 3,000 RMB or she would be fired too. Need to be hard with these people otherwise they will treat you like mugs

Its ironic, the very people who come to China because they are supposed to be so smart end up being so dumb...

talldiver wrote:

kumlong wrote:well most expats i come across dont seem to realise that they can rent cheaper than the budget and pocket the difference

well you can do that if the company has such a policy (some do), otherwise pocketing the difference would be fraud - meaning a potentially serious shortening of your stay if HR come looking for a way to cut their expat bills and send some people home without severance pay

its not fraud. most employers do this to help u to lower ur tax and to them they just pay u up to a max.

kumlong wrote:its not fraud. most employers do this to help u to lower ur tax and to them they just pay u up to a max.

If your company allow it then you are not defrauding your employer, just the tax office.

no one is defrauding anyone to be honest. if u are allowed cny15000 as living cost and the tax authorities allow this and u can back it up with fa piao either for rental or food, how is that fraud? its just working within the boundaries

As long as you pay the 5% tax and produce the fa piao?

Yes, foreign citizens are LEGALLY permitted to have living allowance as part of their package up to a limit of around 30% of their salary. It is NOT fraud. Local staff do not qualify. They can have accommodation paid for but they would have to pay tax. So it is tax efficient to structure foreign staff's package with part of it as an allowance.

chingiskhan wrote:Yes, foreign citizens are LEGALLY permitted to have living allowance as part of their package up to a limit of around 30% of their salary. It is NOT fraud.

Strictly speaking it is tax evasion if you are claiming 15K a month but paying 5K and splitting the difference with your landlord for example. Sure the paperwork may be in place as you can produce a fapiao for the full amount but that doesn't make it legal. According to the Chinese employment regulations the allowances in expats contracts are supposed to be for actual expenditure not for a nominal 30% irrespective of what you actually pay.

how do u define the 15k or the 5k? unless ur landlord comes forward to spill the beans, otherwise there is no way to tell wat ur rental really is. if i pay my landlord cny5000 for rent, 1k for ah yee, 3k for a driver, 3k for media, isnt it only fair to state cny12k?

Supposedly the tax authorities were doing some spot checks a year or so, comparing some expats accomodation allowances with the compounds they lived in to see if the figures were of the right order of magnitude but I suspect the story may have been a bit of an urban myth. But yes it is unlikely that you will be queried about it.

hammerforlife wrote:

chingiskhan wrote:Yes, foreign citizens are LEGALLY permitted to have living allowance as part of their package up to a limit of around 30% of their salary. It is NOT fraud.

Strictly speaking it is tax evasion if you are claiming 15K a month but paying 5K and splitting the difference with your landlord for example.

I wasn't actually talking about that situation, I just meant I pay 6000 rmb for rent and I get a fa piao for 6000 rmb from my landlord. My total allowance is 12k, so I get the rest of my allowance from food, drink and travel invoices. But in truth I don't see the difference. If my landlord gave me a 12,000 rmb fa piao it just means I would not bother collecting another 6k from taxis an eating. I'm not defrauding anyone though because I definitely do spend more than 6k on taxis and dining each month.

Yes I agree although a particularly fussy auditor may try to pick you up on it. I just find it a pain in the backside having to collect fapiao every time I buy some food.

It's much worse now that they use those printed out types instead of the tear off ones. I have discovered a loop hole though. If you buy a card for taxi / subway and top it up, you get a fa piao when you top it up AND again when you use it for the taxi, so if you spend 1000 rmb on taxis, you can get 2000 rmb in receipts.

Back to the original post...are rents falling? I saw a piece on CNN the other day that real estate values are starting to drop especially in HK. My apt contract is coming up soon and wonder if anyone has a feel for the current market?

my feeling is that rental markets are coming down slightly, but not yet really reflecting on what the true market is. There are still landlords who don't want to budge, even though I have a feeling their unit will sit empty for a while. But maybe that's just me and my wishful thinking

Shangstar wrote:

BitterExpat wrote:When you are spending money that isn't your own there isn't as much reason to negotiate prices. You do stupid things like tell the agent you have a RMB12000/month housing allowance and oddly enough the real estate agent only has places that rent for about that price available to show you. Not just rent. Schools too.

Totally agree. I had idiots that did that. Fired everyone of them there and then. The next one I told to find me a 10,000 RMB apartment for 3,000 RMB or she would be fired too. Need to be hard with these people otherwise they will treat you like mugs

I posted the Expat Oath so that China NOOBS could be sworn in upon arrival in hopes we who are already here can avoid getting hosed. Its a WIP

http://www.shanghaiexpat.com/MDForum-vi ... 8640.phtml