Young family relocating to Shanghai

Posted by ears (198 days ago)

My husband is being relocated to Shanghai (from Beijing) by his company, and we will be moving there in June with our baby son who will be turning 1 then.

I've only been to Shanghai a few times and really enjoyed the French Concession. However, my husband's office will be in Jinmao over in Pudong.

We're looking to buy a place in Shanghai since we expect to be there for at least 2 years. Any suggestions as to where to buy? We would like the purchase to be an investment as we will likely be moving back to the US after his assignment.

I love the old houses in the French Concession but they seem so expensive compared to everything else. I was wondering whether the lane houses are good investments, and where in Pudong is a good place for a young family.

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Posted by jackproperty (196 days ago)

Hi there

Welcome to Shanghai!

Maybe I can give you some suggestion about Shanghai real estate market.

Firstly, French concession would be a very good choice for you. In fact, it is normal that old houses in French concession would be more expensive than ones in other areas. But I still think it a very good investment to buy one. Because there are many historical old house with european style architecture that can be seen only in Shanghai, China. And the government would try their best to protect them. Most of them would be there for hundreds of years.

As to living in Pudong for a young family, I think there would be 2 choices. There are many expatriats living in both of these 2 areas.
One is the living area beside Pudong CBD, in which Jinmao Tower is located. There are many big shopping maills, restaurants and also good international schools for children.
The other choice is Green Community, which is located near Biyun Rd and Jinqiao area. There are also many big shopping malls, restaurants and good international schools.
The difference is the first one would be more closer to your husband’s office, which will make a better match for your family.

For more information or more details of Shanghai real estate market, you can contact me via jackproperty@gmail.com or 86-13003155933

Jack He, Director of Sales and Leasing Dept.
Infuture Real Estate Agency
8J, 99 Huaihai Rd(E), Shanghai, PRC
Tel: 86-21-5382.8018 Fax: 86-21-5382.9137
24hour-hotline: 86-1300.3155.933

Posted by Mark_Larsen (191 days ago)

Dear, Shanghai is like any other mayor city in the world. Just consider how many people could afford a place in the French concession should you need to sell it fast. And consider the growing ratio of your investment. For the God of love do not listen to people, listen to facts. Check out the price rise of houses in the French concession as oppose to other areas. And by the way, you do know that once you buy a place you can not sell it within 5 years or else face heavy taxing? Yeah I am sure our Jackproperty friend missed that one!

And by the way...the "goverment will protect your house" means that, as like any other 70+ years building the goverment BY LAW have the right to confiscate your house if they see it fit. Not to mention you can not really do much interior design there...need a whole for your A/C? No, sir, no boogie.

If you buy an apartment in the areas our friend mentioned, you will be lucky IF you can sell it later, and even if you could you will get some 10-20% of benefits at most (our friend will also conveniently forget all the fees you will need to pay).

Now let me give you a real case. My apartment. Bought in 2006 at 530k. Selling in 2007 for 900k. And two years living there rent-free. And since is not too expensive I was getting calls from interested buyers every week.

The whole of Shanghai is being connected by Metro, so the need of a nearby place should not be paramount. Look areas of Pudong nearby line 2, anywhere near Jinmao tower is already overpriced because they are inflating prices for the 2010 International expo.

Good luck!

Posted by ears (182 days ago)

Thanks for the candid response Mark. May I know whereabouts was your apartment? You mentioned that it was still not too expensive, so I guess its still worth investing in that area.

Any recommendations on trustworthy estate agents?

Posted by mark_larsen2 (178 days ago)

Well, I am an investor, so I had a short-term high return mentality. Like I said, I am already sitting in a property that has gone up some x2 of its original value.

I got that one in Minhang, but Minghang has overpriced zones.

If you want full advice you need to tell me 3 things:
1) How much dough can you put in it.
2) Are you willing to commute? Best investments are new areas because they have better grow potential.
3) You CAN NOT sell a property within 5 years, so after your 2 years you will need to rent the place for 3 more years. For that reason, I STRONGLY recommend a small place (<100m2). Those are the fastest ones to sell (their price is lower) and easiest ones to rent (again, renting price is lower). You WILL NEED to rent that place for 3 years before you can get rid of it.

Like I mentioned in another post, I don't do state agents. I first find out what I want and where I want it, then I go to the closest agent (*bonus* if they have a small shop, which means they are more willing to work with you because they have less clients and they will charge lower commision), then I talk to people around the place I want to buy, invite some owners for cigarretes and find out prices in that area, and THEN I offer MY PRICE.

*****
If the person talking to me can speak English, I politely leave the place as fast as possible. You will PAY because you can not speak English. I can not stress this enough.
*****
I can not stress the sentence above enough. Trust me, not dealing with big English speaking companies saved me money like you wouldn't believe. Same goes for those little girls who want to help "for free" but then do arrangements by their own. If you can, go with someone who you really trust. Even offering them commission they will still try to get another one from the agent. I write from experience.

If you are decided, email me and, for a free lunch you may bribe me into helping you out. Write to me at josephzhongguo_at_yahoo_dot_com.

Posted by tigerbay (161 days ago)

There are many agents in Shanghai and all can be trusted (or not) about equally. As Mark said, avoid the big English speaking agencies, there is a premium.

However most properties sell quickly (days) and there is very little room for negotiating on price. 1-2% if you are lucky. And the prices are advertised in teh Estate agents windows.

Go to the neighbourhood you like the look of and you will find agents there with those propeties.

Avoid Minhang, it is a long way out. It can take over an hour to drive to Pudong during peak travel hours.

There are lots of areas in Pudong. Green Villas (mentioned above) have appartments and villas. Is close to a good develpemnt of shops and restaurants and swimming poo/gym. There is a Carrefour and a Western supermarket. There are several schools including international. Not good for metro.

Close to this is Thompsons Golf Villas. Well established development. You will need a car or use taxis a lot.

Another popular ares is Liang Yang. (Spelling may be wrong). This is also known as the 'Thumb Plaza'. Thsi is much closer to Pudong CBD. There are a wide range of shops, reastaurants, cafes, and a western Diner. A short cab ride from the Shanghai Science Museum Metro and close to Century Park. lots of Kindergatens in this area.

I cannot tell you much about Puxi.

DO CHECK THE Property tax situation.
I think if you sell quickly you may be liable to tax on the whole sale value of the property. I am probably wrong but it is worth checking.

There are also other new regualtions on buying if this would be a second or susequent property.

Posted by mark_larsen2 (142 days ago)

PS: Foreigners CAN NOT buy a second property.

Posted by ears (129 days ago)

I took a look around the properties in Pudong and the French Concession during my trip to Shanghai a few weeks ago. Still wondering whether its a good time to buy there or whether we should just rent.

Although we loved all the old houses we views, but since we have a young baby, we figured it would be prudent for us to stay in a new development in Pudong. We've more or less settled on Shimao Riveria. But looking at the rental and selling rates, it seems like property investment in Shanghai doesn't yield too great a return.

A 230sqm apt in Shimao sells for some rmb8mln, but only rents for rmb20k a month. I could get a similar rental rate with a property half that price in Beijing. I guess most investors in Shanghai are looking just for capital appreciation, but in Beijing you can get both capital appreciation and rental yield. We're now wondering whether its such a great idea to invest in Shanghai property given the low rental return and slowly stagnating market.

Posted by Ed (129 days ago)

I lived in the French Concession in an old apartment - sounds good to start but wait till the mice find you, things break and winter air comes pouring through the improperly sealed windows... Add to that you pay a premium to buy or rent the old units and it doesnt make sense

Posted by luke_perry2 (128 days ago)

Return in your investment = Minghang area.

Posted by MJI (56 days ago)

I agree it's not a good time to invest apartment in SH at the moment. Apartment price will be going down greatly soon just like what's happening now in south China.