Among the few favourite discussion topics of expatriates living in Shanghai, housing is one of the most common. When it comes to housing, each has its own standards which can be very different from one to another, but it is useful to have the basic knowledge to understand and better apprehend the real estate market in Shanghai. Do you want to change neighbourhood or housing, to give a second boost to your Shanghai adventure? Not satisfied with your first choice? Or maybe you are about to land in Shanghai in a few months? Students, young entrepreneurs, families with children, here is a general picture of the real estate situation of China’s first city for expatriates, in which everyone always finds happiness after a few compromises.
Overview of Shanghai real estate industry
The real estate market is completely liberalised and works in a very similar way than what one can know in the US or Europe, with a few nuances. When a property is to be rented, it is registered on a general website and accessible to all the agencies, with no exclusivity. Going through a real estate agency is mandatory. The agencies are either small local agencies (those with small ads in showcases), ideal for smaller budgets or for those who have already chosen one specific neighbourhood for personal reasons, or larger, more international and often more expensive agencies targeting expatriate families with big budget/allowances. Agencies are paid by commission, usually one month rent when the rental exceed 10,000RMB, plus a management fee for each renewal of a lease. There are also relocation agencies, for newcomers in particular, which deal with the real estate part, and also offer general services to help expats settling down. These services may include enrollment in schools, various administrative procedures such as work visa or residence permit, tenancy management and other tailored services. This type of service can be very useful as the language is one of the greatest challenges that every foreigner will face when living in China.
Who are the landlords?
They are either private individuals or developers, that is to say, professional investors, specialising in commercial and residential real estate. The current trend is an increase in the share of individual owners, the developers having sold a lot of properties lately. And in general, for equal value, it is often better and safer to hire a developer who is a true professional with a reputation in the marketplace and who will be more vigilant that the level of service delivered is satisfactory for its tenants.
If you are looking to rent it is always useful to get an idea of the availability and price range of apartments and houses on the internet. But beware, sites are often biased and do not reflect the reality. Chinese real estate online platforms are indeed full of junk ads, and misleading information so be very careful when performing a search. At the end of the day, nothing is better than a good old face-to-face meeting with a trusted interlocutor.
Shanghai Housing Supply
Regarding housing options for expats in Shanghai, there are usually four main types. Each type is attached to a specific area and often match with a specific type of expatriate.
High-end apartments are located in the wealthiest part of downtown Shanghai such as Jing’an, Huangpu, Xuhui, Changning and Lujiazui. These properties are often parts of fancy compounds with a lot of facilities (tennis court, spa, swimming pool, gym, etc.). It’s the preferred types of young families and young couples. When it comes to apartments Shanghai has surely the largest variety among all types and should easily meet any of your requirements.
If you want to live in a house, however, the supply might be a bit more restrictive. In Shanghai, houses are often referred as villas. These big properties are almost all nestled in compounds in suburban greener areas of Shanghai such as Pudong, Qingpu or Minghang. They look similar with a garden, a parkway and a garage, much like in the American suburbs. Some of these compounds actually aim to copy these American-styled homes. They usually cost a lot more than apartments and are the first choice of executives with families.
Another choice for executives, but without families, is the serviced apartment. Much like a hotel, these accommodations are perfect for business travelers. They are quite expensive as well and located everywhere in the city, like hotels.
The last type is unique to Shanghai. We call it “lane house”. This property type can only be found in a few parts of downtown Shanghai and mostly in the Former French Concession in Huangpu district. They are the typical housing of Shanghai built in the 1950’s and consists of two-storey houses lined up along a central lane. Young couples and single expats love this type of house as it gives you a feel of living like a local person.
Here is a video if you want to learn more about the property types available in Shanghai:
Buying property in China as a foreigner
For foreigners who want to settle in the long term, it is possible to buy a home in China. Of course, you will need assistance for administrative and banking aspects. Because of the surge of real estate prices, Chinese authorities have recently strengthened their laws of buying real estate in Shanghai. In addition, there are specific rules for non-Chinese, especially for access to bank loans. As it becomes increasingly harder to own an apartment in Shanghai for Chinese citizens, it might be more and more difficult for foreigners too.