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Parents well-schooled in the rental market
2012-07-28
By Nie Xin

With kids now on their school summer holidays and lessons not restarting until September, July and August are often seen as a busy time for locals in the housing rental market.

Dong Libo, a 35-year-old Shanghainese, is currently busy organizing the rental of a new apartment in Xuhui District, close to Xujiahui area.

The deadline is before September when Dong's son will enter Gao'an Road No. 1 Primary School on Wanping Road S., considered a good public primary school.

Dong lives in outlying Baoshan District, where he believes there are fewer good schools. To secure a place for his son at a school of his choice, Dong bought a small apartment in Xujiahui area several years ago and transferred the hukou (registered permanent residence) of the whole family to Xuhui District.

Under the household registration system in Shanghai, this means Dong's son can enter school in Xuhui District. The existing enrollment policy links the public education with hukou.

Arrangements like Dong's are increasingly common in Shanghai. An apartment bought in a certain area to secure a school place there has become known as a xue qu fang (literally a school area apartment, or elite school property). Prices of xue qu fang are often 1,000 yuan to 2,000 yuan more per square meter than for housing further from plum schools. In such situations, due to the high cost of housing, families like Dong's usually buy a very small apartment.

"But a new problem arrives when my son goes to school," says Dong. "If we still live in Baoshan, it's too far away from the school, but the 80-square-meter apartment we bought in Xuhui is too small for us."

Like many parents in such arrangements, Dong is eager to rent a larger apartment close to the school, with the rental fees covered by renting out the apartment in Baoshan plus the smaller one in Xuhui.

This trend is keeping the rental market busy in the summer, though it was even busier among expats earlier in the year, according to industry professionals.

"Many expats generally change their residences or renew rental contracts during April to June - especially among families with kids," says Alice Ai, marketing manager in the Shanghai office of Joanna Real Estate (JRE).

"This let them spend the summer holiday peacefully. They choose residences near schools and villas are popular among them."

JRE is one of the largest real estate consultancy companies in China and specializes in residential relocation services for expats and outsourcing relocation services for corporate HR departments.

According to the latest JRE figures, the turnover of rental of high-end houses and apartments in May was up 5 percent from a month earlier, while the June figure was 17 percent higher than that in May.

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