2001 a Good Time for Movin's On

Beijing expatriates looking for a change of housing scene this year will find more properties up for grabs than in 2000 in both the luxury and non-luxury categories, according to leading real-estate company Colliers Jardine Citic. "And a plus in the luxury apartment market is that it is beginning to undergo a refurbishment trend to enhance customer appeal," said research and marketing manager Jonathan Noble.
"For example, Lufthansa Center's and Landmark's apartments are already undergoing renovation, while works at China World's North Lodge are due for completion in May this year. Such renovations will increase the competitiveness of each of these three already popular developments.

"In addition, the new Oriental Plaza will be putting about three hundred suite-sized luxury serviced apartments on the market from the middle of this year. These will make up nearly half the city's total new supply of top-class apartments for the whole of this year. By the early part of next year, when Oriental's apartments project is wholly on the marketit will in all be offering a total of seven hundred luxury places with a choice of floor plans.

The coming availability of new and refurbished luxury apartments is a complete turnaround from last year, when no new such apartments whatever came onto the market. Then, and currently, the city has a total of 6,005 high-budget apartments. Thus, due to what Noble described as last year's "fair demand" amidst a stagnant new supply, the citywide vacancy rate for this high-end accommodation decreased year-on-year by more than 10 percent.

In all, 810 new luxury apartments will come on-line this year, taking the total in this sector to 6,815.The 810 will be made up by the 300 at Oriental Plaza, the 272 Somerset Grand Apartments and 238 at Fortune Garden, also a Somerset Holdings invested property.Somerset is a Singapore-based developer. By the end of this year, 70 percent of Beijing's luxury residential stock will be located in Chaoyang District, which has evolvedinto the most popular living area for the city's foreign expatriates.

Noble observed that with the decrease in vacancy rates for luxury apartments throughout 2000, rentals have continued to increase a little for the most popular developments. "Counterbalanced by rental discounts in less desirable luxury projects, overall average rentals remained steady during 2000 at an average of US$23.67 per square meter per month over the entire city," he said. "This was about one dollar more than in 1999. Inflation is expected to be a factor in sustaining these rental levelsthis year, though there may be a small increase in the citywide average -- probably to an average $25.15 citywide -- because of the debut of the new prestigious apartments."

For the majority of expatriates, the other side of the accommodation coin is the non-luxury apartment sector, not that the average dwelling is along the lines of a cattle-shed. Last year saw 2,258 such all-mod-con apartments enter the market, pushing the city's total to almost 16,000. Noble said this year's new supply is again expected to be substantial, with 1,805 units planned to come on-line. All but 200 of these will, as in the past, be in Chaoyang District, where the total number will reach 11,850, or 67 percent of Beijing's total non-luxury expatriates' dwellings.

At the end of 2000, more than one-quarter (27.80 percent) of non-luxury apartments were vacant. This was three percentage points down on the end of 1999. Noble said there was moderate demand for new non-luxury properties last year, while expatriates' quest for those deemed "less desirable" continued to contract as options expanded.

He explained: "Although the vacancy rate was and is still relatively high, its decrease last year amidst large new supply indicated that demand was more robust than in previous years. Indeed, healthy demand was corroborated by the substantial absorption of over 2,200 units in 2000. Absorption this year is expected to approach 1,400 units."

Rentals for non-luxury apartments have fallen by more than 30 percent since 1998. It is expected that, unlike luxury rentals, the downward trend of this category will continue this year, with the average rental falling 3-5 percent year-on-year. Non-luxury rentals for 2000, stable throughout the year, finished at an average $14.24 per square meter per month.

So start looking, expatriates. There are bargains to be had. Just beware landlords who "see you coming" Thoroughly scrutinize your tenancy agreement, and on no account sign anything based on the landlord's promises ... like a new 'fridge, perhaps. Also ensure the contract has a break-clause, say two months -- notice, if for some reason you need to leave Beijing.

And because it's currently a "buyers' market" don't be shy in asking for as many amenities and extras as you can get. Examine furnishings carefully. If the sofa is a bit moth-eaten, press for a new one. The same applies to anything else in the apartment. Well-worn tables and chairs give you negotiating strength. Demand new ones, though be prepared to concede a little on the rental front.

Good hunting!