According to property consultancy firm Knight Frank, an influx of foreign workers – combined with more restrictive home-buying conditions – will see rental rates among Shanghai’s expat housing increase substantially in the months ahead.
In Knight Frank’s report, entitled ‘Shanghai Expatriate Housing Market Insights 2013’, expats relocating to the city will see a hike of up to 8 per cent in their rent.
The report also stated that rental rates are most likely to increase in area’s like Pudong, where demand for expatriate housing is on the up. Rent in Pudong is already one of the highest among Shanghai’s expat-popular regions at roughly 189 Yuan (30.49 US Dollars) a square metre.
In some luxury serviced-apartment complexes, rent can range from 30,000 to 65,000 Yuan (or 4,839 to 10,485 US Dollars) per month.
If Frank Knight’s estimated 8 per cent rent increase occurs these figures could rise to between 32,400 and 70,200 Yuan (or 5,226 and 11,324 US Dollars) a month.
Vacancy rates are also forecast to fall to a low of 4 per cent this year.
Over the past two years rent has steadily risen, along with occupancy rates, as a result of a booming expatriate housing market.
As Regina Yang, the head of research and consultancy with Frank Knight, noted; ‘The city’s economic growth and its status as China’s financial capital continued to attract foreign workers.’
With the number of foreign workers in Shanghai on the up, rental costs are predicted to continue increasing over the next two years. As well as a disparity in supply and demand, property cooling measures will also be responsible for rising rent. Government policies are encouraging a proportion of the local population to seek high-end rental properties in the most coveted, and largely expatriate dominated, areas of Shanghai.
However, Yang went on to add that a larger number of companies are offering their workers localised housing packages in order to increase choice and flexibility.