Shanghai Real Estate Market - Is It The Right Time To Invest?

In the last three years, the world saw the biggest economic crisis in decades. In fact, estimates show that conditions were only next to the Great Depression of 1930. Although all industries were adversely affected, the banking and real estate industry took the worst of all beating. While most countries of the west took a heavy blow, there were certain economies in the east, especially India and China that emerged more stable due to the massive internal demand. With the global financial crisis being officially over, let us take a look at the real estate market of Shanghai, China - has it started emerging from the crisis and is it the right time to invest there?

2008 was a tough year for the Shanghai real estate market. The year saw a steep fall in the rentals and pricing of both residential and commercial properties. However, unlike Europe or the United States, China and specifically Shanghai saw very low levels of distress sales. This has been largely attributed to the massive liquidity in the internal economy of the region. The enormous stimulus packages given by the government also boosted a speedy recovery and by the 2nd quarter of 2009, the Shanghai real estate market started showing signs of strong rebound.

As for the current scenario, leading surveyors of the industry have indicated outstanding growth patterns in the Shanghai real estate market. Subsequent to the success of the huge stimulus packages given by the government, Shanghai is now seeing a sharp upturn in the prices and rentals of both commercial as well as residential properties. As per the statistics released by the National Bureau of Statistics, China, the over all real estate market of the country in 2009 has been evaluated at 3,623 billion, with a 16.1% increase from 2008. Needless to say, Shanghai is one of the star performers in this field.

According to the China Real Estate Investment Handbook, 2010 edition, released by Delloitte, the residential sector is showing much higher growth than the retail or the commercial both in terms of sales as well as rentals. The first half of 2009 saw a sharp rise in the land and residential property sale prices in Shanghai and other tier one cities of China. This has now led the Chinese government to introduce measures to control the astronomical surge of real estate prices.

Considering such remarkable recovery and growth pattern, the Shanghai real estate market is one of the preferred destinations for investors from across the world now. In fact due to the limited availability of land and property in the main town area, the outer limits of Shanghai have become the new focus area for many private investors and developers as well as giants from the insurance and banking industry from across the world.