THE housing rentals for expatriates in Shanghai are likely to rise this year as vacancy rates remain low despite tightened corporate budgets, an international real estate services provider has said.
The rents for expatriates are likely to go up 8 percent in the city, while the average vacancy is likely to stay at around 4 percent, according to Knight Frank's latest Shanghai Expatriate Housing Market Insights.
"The city's economic growth and its status as China's financial capital continues to attract overseas professionals," said Regina Yang, head of research & consultancy at Knight Frank Shanghai. "The inflow of expatriates into Shanghai is therefore expected to remain strong, leading to increasing demand for expatriate housing, especially in the Pudong New Area."
Among all key areas preferred by expatriates in the city, downtown Puxi, including Xintiandi and Jing'an, and Lujiazui in Pudong registered the highest average rents of 189 yuan (US$30) per square meter per month last year, the study found.
They were followed by decentralized Pudong, areas that include Jinqiao Green City, Longdong Avenue, Huamu and Nanhui, with an average rental of 165 yuan per square meter per month in 2012.
Tightened credit
The other preferred locations by expatriates, such as the greater Hongqiao area that includes Hongqiao, Gubei and Xujing, saw average rental stand at 140 yuan per square meter per month.
In the coming two years, rentals are expected to go up mainly due to tightened credit and home purchase restrictions.
The policy has led to an increasing number of local Chinese demanding high-end rental properties in the range of 10,000 to 25,000 yuan per month, further stimulating demand in the prime areas of Shanghai, according to Knight Frank.
Shanghai tops the list for the largest foreign population in China - 173,000 by the end of December last year.
The number of expatriates working in Shanghai totaled 164,359 by the end of 2011, and almost 70 percent of them rent houses or apartments ranging between 10,000 yuan and 30,000 yuan per month, including those without a housing allowance, the Knight Frank report claimed.
