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Q: Do you expect the residential rental cost to go down in 2012?
In 2012, I expect to see either a modest increase, or rental prices will stay the same. In 2013, it will probably drop due to heavily increased pressure from the west on currency issues.
However, this depends on where you plan to live, etc... There are a thousand and one variables that affect this kind of thing.
Mainland chinese sometimes have very odd mentality in business. sometimes they rather not reduce the price simply because of face reason and at the end they would think, well i dont need the cash, so why bother. To understand them sometimes u cannot use logic from a western point of view.
It also depends pretty much of required level, location etc.... At the moment I can't think of any reason why it would go down further. Rents are already ridiculously low compared to purchase price or "valuation".
What's more likely is that real estate values will drop or at least stagnate, and rents will slowly creep up as owners start to realise there is a steady demand for good rental properties and that money actually can be made. Also the 'market' works different here, In this situation, with a slight fall in real estate prices, rentals are actually going up.
It takes time to work through the system only because most rental leases are at least one/two year each term, so many contracts have not yet expired and with the greater demand for low end rentals, say under 6,000, it is unlikely you will see a fall, in fact, more likely to see a hardening.
Less and Less, expats Renting high end units, say over 10,000-15,000, so that is a different story. Many are empty, and for some reason, landlords dont like that, and are forced or willing to give discount, to get tenants.
As always, supply and demand are the driving forces. Then every landlord is different. Most are greedy but some can't be bothered to look for new tenants who may or may not be as reliable as the existing one, so to save themselves hassle they might agree to reduce or maintain rent.
As a side note: China can easily re-ignite the market if they loosen the bank credit!
