Thursday, September 14, 2006

Finding an Apartment

With my first apartment I moved in with somebody who had an extra room, they took care of all the details - when I moved out, I still didn't know what my landlord looked like! With my current apartment I wanted to live by myself, in a busy part of town. This involved some footwork. You can rent apartments off the Internet or a classified, like with the US, but the normal way to do it is through a real-estate office:

I just wandered around - first I found the neighborhood I liked, and then I wandered around until I found a real estate office. There's lots of them, all around, so if I wasn't happy with what they had to offer, I just went to another one.

Some of the offices look upscale, but a lot of them have the feel of back-alley black markets. They're not particularly clean, office furniture looks like it had been rescued from a dumpster, people sit around gabbing. Even now that I'm not in the market, sometimes I look at the signs they have posted in the window, or on A-frames, listing apartments to rent or buy.

They make money from taking one third of the first month's rent. There's limited leeway to bargain - in my case, two different real estate agents has listed my apartment, so the person helping me was able to play the two off each other, and get a discount. And, the rental price of the apartment can also be bargained. Again, I sat back and let the person I was with take care of that. I'm out of my league, trying to bargain in China!

How are the apartment prices? Top business publications rate Shanghai as one of the most expensive cities to reside in. Living in a prestigious foreigner-owned apartment complex is going to cost at least as much as living in the SF Bay Area. The apartments listed below are cheaper. They probably house a lot of foreigners, but aren't quite in a prestigious part of town. They are listed by the RMB (eight RMB is about one US dollar) and by the square meter (one square meter is about eleven square feet). For example, the apartment on the bottom right is $1000/month, but is 1400 square feet.

My furnished apartment is about a third of that, and I consider it very nice, near the subway, and in an upscale part of town, although it's a little small. On the other hand, most of the young and fairly well-to-do Chinese people I know rent apartments that are around $200 or $250 per month. They're every one saving up to buy a house. Owning a house is important in America, but to people I know in Shanghai, it's even more so - generally people won't get married until they own a house.

It's kind of a surprise, but while most of the real estate operators are independent, Century 21 has a small presence here. They mailed a brochure to my apartment so I might as well show it here:

The houses below range from $90,000 for a 500 square foot apartment, to $250,000 for a 1,300 square foot aparment. Both are in a nice and central part of town.

To be honest, at the premium to own rather than rent, I'm not sure it makes sense to buy an apartment, except as an investment. And I'd be suspicious of Chinese real estate as an investment - there's certainly good opportunities, but there's a significant chance that Shanghai real estate is in a bubble, and the government has shown a willingness to suddenly apply relevant laws on a whim - last month suddenly adding a capital gains tax, last year suddenly regulating mortgage rates, etc.

Just as with the US, real estate in Shanghai and a few other cities is drastically more expensive than living in the countryside. Chinese cities don't really have a suburbanization movement, and I consider that ideal as I really don't like suburbs. On a drive to the airport, you do catch the odd glimpse of foreigner suburb enclaves - I hear these rentals are massively expensive, and the buildings are in a thoroughly Western style, you could forget you're in China.

For many Chinese people, having the apartment be brand new is one of the most important factors. I don't think newer apartments are necessarily any better, although as a general rule, older apartment buildings tended to be built in a more utilitarian manner - for example, they may be missing elevators.


Oaktown Crack said...

Do you have to worry about stuff like asbestos over there?

Jeff Rutsch said...

Probably. My main worry is that my apartment doesn't have a fire alarm (I'm searching for one). Or, that a homeless lady searches through my trash, maybe she's compiling secrets on me and will tell all my neighbors.

No thanks for giving me one more thing to worry about ;)