Shanghai property – up, down or sideways?

The Shanghai property market is probably the most liquid and long-term safe investment that can be made in mainland China, as long as you choose the right place, of course. Short-term, it is always hard to say. But the feel of the market seems to be changing. Over the past year it has been down down down after several years of up up up. Now, people I trust on this market believe that the government’s tune is changing, from focusing on stopping speculation to supporting prices. Continued falls in property values doesn’t help the Shanghai government, which needs to make money off land sales. The long term positive factors are still there – Shanghai’s fate to become the New York of Asia, average prices lower than other major world cities and the determination of every Chinese person to be a middle class home owner. Balanced against these are the following negatives – oversupply in residential, poor construction quality with many developments and signs of a sustained revival of the stock market. Why put your money into property when you can play stocks? But the government factor is powerful. If it is true that the government is basically moving towards a policy position supportive of prices, then the bottom is at least in sight.