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Is the Real Estate Cooling Down? - Part II the most recent data indicate that occupancy rate in shanghai fell to ~83% from 89%. |
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Is the Real Estate Cooling Down? - Part II As for the percentage of foreign property investment (residential sector), the figure is not as bad as people would like to think. Here is the figure: House purchased by foreigners: 4% House purchase by individuals from other chinese provinces:15% House purchased by Shanghainese: 81% ~75% of shanhainese owned their house. According to rumors (no hard evidence or concrete number supporting it), up to 40% of the property bought in shanghai is for investment purposes by shaghainese, foreigners and individual from outside provinces. I personally agree with these figure. Not all foreign buyers look at shanghai apartments as dollar sign. Many overseas chinese (accounts for the majority of foreign buyer) who returns to the mainland bought houses for long term use. They ussually have other investment in china as well. Many also bought their homes as a way to express their nationalistic pride of their ancestor land (minority). In my opinion, the overall health of the chinese economy is the deciding factor for the direction of the real estate sector in shanghai. Lets also not forget the large amount of migrants (rich and poor) from other part of china migrating to shanghai. They will continue to come as long as they see opportunity in the growing economy of shanghai. Many shanghainese also wants to upgrade their living conditions and they are also the major source of real estate demand in shanghai. Recently speculators is having a hard time investing as the government and banks restrict their lending to investors. I know more and more investors buying homes using 50% cash as they cannot get large amount of mortgage from the banks. Despite these measures to curb investment and speculation, the property prices continues to rise. I think the demand in shanghai is fundementally strong and relatively healthy as long as the economy of china and shanghai continue to grow. To top things up...the vacancy rate as well as the rental price in shanghai is on the rise. I do not think there is a buble in the short or medium term. The demand surpasses supply and will continue to be so for a period of time expecially within the CBD inner ring road area. Investor will see no reason to sell their property anytime soon. |
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EndAds and BlockMessenger Thank you for your help with this. I have made the complaint as you suggested also. |