Throughout the previous five years of observing and reporting about the apartment Shanghai and home market, one thing is certain. Shanghai property market is past bubble. It seems to be post-bubble. Or even bubble-proof. Together with the trend still in effect, and with property and rental flat holding the favorite investment for a middle class that do not have enough cash to shuffle into further afield or Hong Kong, China home is the hottest real estate market around.
Additionally, the living cost in Shanghai is going up. 1 thing is certain — real estate agencies are currently doing well in the near future with Shanghai property market Shanghai apartment lease is big business.
On Wednesday, global land consultancy DTZ/Cushman & Wakefield said that Shanghai in particular will probably maintain double-digit growth in trade volume and value this season. Investors aren’t far behind, although the buyers are domestic.
Property investment deals, excluding property sales, are focused to total $70 billion in Shanghai in 2017, a 20 percent increase from about $58 billion last year, according to a report by Wakefield. One sector that is growing is need for serviced apartments around Pudong district.
The report cited reduced funding costs in China (and at the core markets like Japan) and also yuan depreciation expectations lending to fears that now is the time to enter the market before the money value dives. The yuan is currency trading at 6.67, however, consensus estimates have it pushing closer to 7 at the next six months.
The report also cited demand by local insurance firms who demand challenging assets to hedge against low yielding fixed income. Insurance companies often invest in bonds. However, when bonds are yielding less than 3% and inflation is about 1% in China, that does not leave a good deal of growth for insurers who need to have assets which can cover account holder liabilities. Many U.S. cities are on the receiving end of China life insurance company property investments, including properties in Boston and the famous Waldorf Astoria. The Anbang Insurance of China now owns the iconic New York City hotel and apartment Shanghai.
Of the $18 billion worth of land deals completed in the first six months of the year, 76% were sealed by investors.
Investors are searching for income. Office buildings are the most sought-after properties, accounting for almost 60 percent of the total apartment by value in Shanghai sold this season, Cushman data revealed.