Posts Tagged ‘economic crisis’

A Softer Market

Thursday, February 19th, 2009

Cakes and fruit baskets are always welcome at our office, but less so when it’s an enticement. Since December last year sales teams from Beijing’s top-tier serviced apartments have been bearing gifts when dropping by to say “Hello”. Always the first to react,  rents at  Embassy House and Ascott have been slashed by 15-20%. They’re also offering more flexible lease terms to maintain occupancy levels. A lower floor 2 bedroom apartment at Embassy House now rents for RMB28,000/month. Compare that to last years’ rent of RMB35,000/month.Individual landlords are following suit with similar drops at apartments such as  Park Avenue and  Central Park. In suburban Shunyi we’re seeing a similar drops in rent levels at  YosemiteRiver Gardenand  Beijing Riviera.With no viable new supply coming online, we expect occupancy to remain high at the main expat residential communities. Landlords at less popular communities, and also at older or poorly renovated properties may face tougher times if they don’t renovate or make large rent adjustments.There’s no doubt that our clients are tightening their belts and on the look out for cost savings. Still, January was an unusually busy month for us. But with the month’s  33% drop in foreign direct investment, we’re cautious about this summer’s expat relocation season.On a side-note, in an effort to stimulate lacklustre sales, the government has lifted the 12-month prior residency requirement for foreigners wanting to buy property in China.