Rents on high-end properties drop
10/9/2003 14:35
Rents on high-end housing properties continued to drop in Shanghai
this year, with the supply of housing priced at more than 7,000 yuan (US$843)
per square meter exceeding the market demand, the Youth Post reported
today.
Rents on high-end properties have been cut by 30-50 percent this
year as a result of more real estate investors crowding into the local home
leasing market, according to a local housing agency.
High-end properties
are mainly located in Pudong, Huangpu and Luwan
District, with the Lujiazui
Financial and Trade Zone a conglomerate of luxury properties.
Last year
Luxury two-room apartments in Lujiazui area rented at 7,000-9,000 yuan per
square meter on average. Currently the prices have dropped to 4,000-5,000
yuan.
Rents on high-end housing with three bedrooms and one living room
in Luwan District were cut by 500-1,000 yuan over the past several
months.
Many locals are choosing to buy properties rather than lease due to
the rising rents, said an industry analyst.
Many locals have bought
properties for investment purposes, so the
number of rented housing is
soaring fast, dragging down the rents, the analyst said. The rent cut will also
lead the local housing prices to negative territory, as normal housing prices
should equal 150 months of rents, said Yin Shenhua, professor with the real
estate research center of the Shanghai University of Finance and
Economics.
Wendy Zhang/ Shanghai Daily news
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