I want to talk about real estate prices in "low corner" Shanghai -- the wrong side of the tracks as it were. Specifically, a neighborhood dating from the 1950's in Yangpu district in the Northeast.
The area north of the Huangpu River and east of Suzhou Creek is the Hongkou district. In the mid-19th century it was the American concession, and with the formation of the international concession in the 1860's, it gradually became the defacto Japanese residential area. Much of it (along with the adjacent slums of Zhabei north of Suzhou Creek) was destroyed during the first invasion of Shanghai by the Japanese in the 1930's. It became the Jewish ghetto after 1941, and then became an industrial area after the Revolution. Most of the housing is concrete block work-unit apartments built during the 1950's and 1960's. Joseph Gamble in his book Shanghai In Transition : Changing Perspectives And Social Contours Of A Chinese Metropolis devotes much attention to it, since his wife's family lived there, and he lived with them for some time while doing his social research.
The Yangpu district is directly north of Hangkou. It became part of the city only in the 1950's, when the campuses of many of the newly reorganized universities were moved there. The southern part of the district, which I will be talking about, was built up with the usual 5-6 floor concrete worker housing, features a large park (Yangpu Park) and is served by subway line 8. Over the last 15 years, there have been hundreds of new high-rise apartment (condo) towers built there. Chinese condo complexes seem to have problems with maintenance, and so those towers older than a few years definitely show their age.
The condo complexes which I priced are located between Kangjiang Road and Benxi Road east of Jiangpu Road towards Yangpu Park. They are within a few blocks of a subway stop, and 8 stops (about 20 minutes) from downtown. They are in fairly new buildings (illustrated) and are almost all between 625 square feet and 1050 square feet. It should be noted that Chinese apartment areas include some of what would be considered public space in the US, so quoted figures should be reduced by about 5-10% to make them strictly equivalent. Ignoring this detail, the average price per square foot of the apartments in this area is US$377 at the official rate of exchange.
One of the condo blocks priced
Another of the condo blocks priced
This is not a neighborhood where people live cosmopolitan global lifestyles. On the street, almost everyone speaks Shanghaiese and not Mandarin -- some of the older people appear not to be able to speak Mandarin at all. Many people still go about in their pajamas, and some men in their underwear. Clothes are anything but trendy -- many of the older men go around in shorts and singlets, and few outfits can have cost more than US$15. The shops sell only the basics. There are lots of bicycles and few cars; the cars are mostly older VW's or low-end Chinese brands. The only foreign face I have seen there is my wife's. The trendy brand-conscious crowds of high corner Shanghai are a world away.
In other words, US$377 per square foot for an apartment in this neighborhood on the outskirts of Shanghai is an incredible amount of money. Ignoring purchase power parity, the condos here are priced the same as in the most trendy areas of Portland, and twice what you would pay in the far outskirts of town. Given Chinese middle-class incomes and other prices, a small (650-750 square foot) apartment for US$300,000 is equivalent to over a million dollars in the US. And I suspect that few of the people in the neighborhood in question have middle-class incomes.
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