tagged: housing market china, luxury apartment shanghai, sell apartment shanghai

Looking to Sell a Luxury Apartment in Shanghai?

Posted by Mike in China Living, Finances

I’m sure that a few of my readers are in the market to buy or sell an apartment in Shanghai. I’m also sure that a few of my readers are also interested in seeing exactly what a luxury apartment in Shanghai looks like. If either of these two statements applies to you, this story of one man’s journey of a Shanghai Apartment sale by himself (FSBO) should be of interest to you.

Henry Liu, a naturalized American, and a current part-time MBA instructor at Jiao Tong University, is going through the challenging experience of selling his luxury apartment by himself. This difficulty is compounded by him not being a Chinese citizen. With two challenges ahead of him, Henry has quickly educated himself on the Shanghai housing market and shares some of his knowledge with us.

How Real Estate Prices Have Changed in Shanghai Over the past 20 Years:

In the late 90’s, real estate in Shanghai was selling for as low as 1,000 RMB per square meter. Today, prices for new apartments near Xintiandi, or “Heaven on Earth”, just a stone’s throw from his home are going for as high as 120,000 RMB. Still, buyers are snapping up those centrally located homes without any worries of the price coming down anytime soon.

How Henry realized that working through a real estate agent was a mistake:

“It took me about a month promoting the home mostly on the reliance of local agents that I realized, to sell this home, I needed to get more involved. You see, as a result of the housing boom in Shanghai mostly as a result of those having made it big here and others with the desire to live in this cosmopolitan city, buyers have come in droves, paying cash to gobble up the house here… Whereas it would be normal for buyers to pay in cash, that price however seldom exceeds over 10M RMB. Unless it’s a really “special” place.”

Instead of leaving his apartment in the hands of a real estate agent, Henry took his apartment in his own hands and began promoting it through local agents via Internet and countless brick-and-mortar storefronts. Henry has also expanded his reach of potential buyers to not just those within China mainland, but also those living in different countries and interested in moving to or owning property in China.

Henry’s take on the perceived “housing bubble in China”

“It all comes down to the simple law of supply and demand. Shanghai is where it’s at. And there is only so much space in downtown for its 20-million or so residents to live.” For naysayers who wish to see the property market slide to more affordable levels, Henry adds: “Comparing China’s property market to any other in the world is like comparing apples to oranges. With a population of 1.3b all having maintained a traditional savings mindset unlike those say, America, there has been no better chance than now for Chinese consumers to spend, spend and spend. Keep in mind, there is only enough available housing to fulfill 20% of the population. And there is enough of that population that can afford luxury, as we have seen with wild spending sprees on LV products, Bentley automobiles, and even luxury penthouses by the new Chinese-rich.”

What Sets Henry’s Apartment apart from the rest?

“What we are talking about here is a reasonably priced property per square meter considering the market prices downtown, albeit a total floor-space of nearly 2500 sqm. Unless you live in one of the few villas downtown, typically hoarded by former statesmen or the government itself as a “heritage architecture”, it is rare to find such a three-storey penthouse downtown.”

Why then, if the house is so desirable, hasn’t sold yet?

“One man’s palace may be just another’s home. There are many perceived differences between what a foreigner considers valuable to him or herself than a Chinese when seeking to buy. Despite the consistency in rave reviews from Westerners, there has been an arc of odds and ends that local buyers get picky about. Whereas such luxuries as marble flooring, a Western kitchen, and terrace featuring panaromic views atop downtown Shanghai speak for themselves to a foreign buyer, they in fact, hold little in value to the many locals. Where cash is king, and most Chinese homebuyers in the market for a luxury residence are awash with it, they could always buy now and renovate it however they want later. A home’s location, age and above all else, the direction which it faces seem to have the greatest pull with local buyers. It is said that homes with southern exposures also expose themselves to the maximum amount of sunlight conducive to an individual’s well-being. Local and traditional folklore has been so ingrained in the buying mindset here you cannot avoid catering to it.” The difficulties in addressing certain inquiries has almost made Henry wanting to contract his own Feng Shui master to proclaim the home as holding certain mystical properties. “In all reality, I have turned my attention towards focusing more on the spaciousness, area schools and hospitals, and the convenience and prestige in living downtown.” Whether that buyer comes from the mainland or out of the country, Henry remains confident that in due-time the home and its most suitable occupant will find each other.

Henry’s goal is a simple one — Henry intends to put his naturalized American parents, sooner than later, into retirement.

“It was a dream come true when my family immigrated to the United States thirty years ago. I witnessed how hard my parents saved and worked to raise two boys in Cleveland over the years. The country has been good to us, and now you can say I am attempting to fulfill the traditional Chinese dream of putting my parents up in the retirement they waited a lifetime for”.

For those of you who are interested in seeing pictures of Henry’s apartment see below…

Interested in speaking to Henry about this apartment or experience? Reach out to me at mike@movingtochinablog.com and I will personally connect the two of you.