Knight Frank releases the Shanghai Expatriate Housing Market Insights 2013 report, which reveals that the rental rate of expatriate housing is expected to increase by 8% in 2013 and that the vacancy rate will remain low at 4%, even though corporate housing budgets have tightened.
The inflow of expatriates into Shanghai is expected to remain strong, leading to increasing demand for expatriate housing, especially in the Pudong area. “The city’s economic growth and its status as China’s financial capital continued to attract foreign workers,” commented Ms Regina Yang, Head of Research & Consultancy at Knight Frank, Shanghai.
Among all of the key areas of expatriate communities, Downtown Puxi and Pudong areas have the highest rents, reaching RMB189 per sq m per month. Rents are expected to further increase in the coming two years due to the tightened credit and home purchasing restrictions imposed by the Chinese government. The Government policies have also led to an increasing number of local Chinese demanding high-end rental properties in the rental range of RMB10,000 to 25,000 per month, further stimulating demand in the prime areas of Shanghai.
While the demand and rents for expatriate housing are expected to rise, a greater proportion of companies are offering localised packages to allow greater flexibility and choice. Regina adds, "Shanghai expatriate housing landscape is evolving quickly with the development of international schools, emerging new commercial districts, rapidly expanding infrastructure and the development of higher quality housing options to meet expatriate demand and help in a smooth transition to a new posting."