Old houses in Shanghai are increasingly attractive to expatriates as residences, studios and business space, and prices are soaring.
Most of the structures date from the late 18th century to the 1930s and were designed in European styles in former foreign concession areas. They are concentrated in Xuhui and Jing'an districts in high-end locations with three-lined streets.
The three major types are garden houses, lane houses and apartments. Construction is mostly reinforced concrete or bricks and wood.
Large areas of historic structures were destroyed in the city's urbanization drive, thus, the number of such houses is quite small and the purchase and rental prices are very high.
Investors are attracted by both the rising value and the history and culture associated with old houses and old neighborhoods.
Many expats prefer older housing because it's more graceful and interesting than new buildings. The old houses can tell many stories of old Shanghai.
The increasing value has been dramatic in recent years.
In 1997 Nie Renjie, a local real estate investor, bought a villa on Anting Road, a prime location in the middle of the former French concession. It's quiet, convenient, home to several consulates and close to Henshang Road, Xujiahui and a Metro station.
The 1920s three-story house covers 400 square meters and has a 300-square-meter garden; it was designed by a Portuguese architect. Nie spent less than 10 million yuan (US$1.5 million) and today, after 15 years, the market price is 10 times higher.
"I also invest in other real estate such as apartments and new villas, but the investment in this house is very unique and successful," Nie says. "In addition to the sharp increase in value, the old house is a good quality structure with good quality design. It's rich in culture and history, which cannot be offered by new houses."
The house is leased to a Swedish restaurant and bar that's popular among expats. Opening upscale restaurants and bars in old houses of this kind has become a trend in the past 10 years.
Rental fees for old houses continue to increase, especially those with a large area and independent garden, according to Andy Ye, from Maxview Realty. The company caters to expats and provides a full range of services covering rental apartments, serviced apartments, villas and houses in Shanghai.
The rental fee for old houses now is generally higher than that for new apartments and houses. In the city center, for example, a lane house of 200 square meters rented for 35,000 yuan to 40,000 yuan a month in 2008; rent is now more than 50,000 yuan a month.
The rental of an old apartment with two bedrooms totaling 100 square meters has increased to 18,000 yuan from 12,000 yuan several years ago.
"Most people, especially expats, rent old houses for residences. Some will use them as offices or studios. The popularity of old houses is one of the important reasons for the increased rental," Ye says.
Some investors also buy old houses, renovate and redecorate them in a modern style and rent them out for high fees. Old charm and modern amenities are another reason renovated old houses have become a hit on the market today, according to Ye.
Living in old residences, soaking up the atmosphere and history, is appealing to more and more expats. But at the same time, many old houses have shortcomings compared with new apartments, including lack of parking, lack of security guards, poor toilet facilities, leaks, old plumbing and old appliances.