SUMMER is hot, but Shanghai's home leasing market, mainly driven by demand from new residents, is even hotter. This will probably continue for another few weeks.
In July, the home rental index compiled by Shanghai Centaline Property Consultants Ltd, operator of the city's largest estate chain in terms of transaction value, rose 2.2 percent from June to 148.4. Eighty-seven percent of the 200 residential projects tracked had an average rental growth of 3.5 percent.
"We usually do around 15 deals per month in the off season, but we managed to double that to 30 in July, and in the first half of this month, 12 deals have been completed," Zhou Haibin, manager at Haokun Real Estate in the Pudong New Area, told Shanghai Daily.
Lily Yu, who has just secured a 90-square-meter, two-bedroom apartment near Century Avenue after viewing five apartments in five days, said: "The property consultant kept telling us it's the busy season as a large number of new graduates who have secured jobs in Lujiazui are now hunting for apartments. You will see groups of home-seekers brought by different agents at the same apartment at the same time and you need to make a decision quickly if you like it or it will likely be gone the next day."
Yu, who just came back from the US, has started her career in Shanghai after receiving an offer from a major international accounting firm. She will share the 4,000 yuan (US$630) monthly rent with her roommate, who is also her colleague. Yu said she is satisfied with the deal although the decision was made rather hastily.
Advertising graduate Vincent Zeng arrived in Shanghai last month to improve his career prospects. He was living in a 20-square-meter apartment in Xiaomuqiao area, Xuhui District, and is paying a monthly rent of 1,600 yuan per month. Zeng said poor living conditions and inconvenient transportation make life difficult.
Suburbs more popular
The ventilation is awful, and the kitchen and washroom are in a public corridor, he said. The public bus he takes to the office goes in a loop so he has to walk 30 minutes every day.
"I'm definitely not content with this place, but I had no alternatives the night I signed the rental agreement. I'd rather live farther and commute by subway every day," Zeng said. "I plan to move to a better furnished house within a budget of 2,200 yuan in three months."
Old apartments in downtown areas no longer are the first choice for people like Zeng. Newly built apartments in suburban areas with easy access to subway lines are becoming popular.
Xiao Mingyong, a graduate of Tongji University, now lives in a 75-square-meter apartment in Baoshan District with two roommates. It usually takes him 50 minutes by subway to get to his office on Nanjing Road E.
"Though Baoshan is a little bit far, our apartment is within walking distance to the Metro station, so actually it's very convenient," Xiao said. "Besides, the monthly rent of 3,300 yuan, or 1,100 for each, is very affordable."
Areas near the university campus, such as Wujiaochang, are also very popular among graduates.
"They prefer the campus atmosphere as well as convenient access to its facilities. They can study in the library, and it's easier to move from their dormitory to somewhere close to the campus," Xiao said.
More than 10 of Xiao's classmates decided to stay in Shanghai upon graduation instead of returning to their hometown. The majority of them chose to share an apartment with two or even more roommates.
"One-bedroom apartments for around 4,000 yuan and two-bedroom apartments for around 5,500 yuan are the most sought-after houses, both of which will find interested tenants once they are listed for leasing," said Cai Hong, business manager at Pacific Rehouse's Caoyang branch.
"Many tenants prefer to share an apartment with someone they know so that they may avoid the trouble getting along with strangers."
Housing rents increased by an annual 10 percent on average over the past few years in Shanghai and it has been growing even faster in recent months amid tight supply.
"Rents will continue to go up as graduates are still looking for apartments," said Cai. "We don't have many apartments to offer our customers at the moment so home seekers have to make up their mind in a very short time otherwise they will find it gone the next morning."