Shanghai underground

Stepping onto a Shanghai subway in the morning is not one of life’s simple pleasures. It is, in fact, far from simple and not a pleasure at all – being swept on by the battling masses is an appropriate way of describing it. But, as in many cities across China, the metro has become part of the Shanghai commuter’s daily routine.

Today, China is the world’s largest urban rail transit market, with subways in the country’s major centers and second-tier cities like Nanjing, Chengdu and Wuhan. The Chinese subway boom is well under way. Beijing, for example, is building a 4,396 kilometer-long subway line that stretches to most of  the capital’s  Olympics venues.

Shanghai is seeing similar expansion. It has five subway  lines and plans to add five more by 2010. But how does mass transit expansion affect the city’s residential property landscape?

First steps

When Shanghai’s first metro line was built in the early 90s it was a big deal.

“The less developed southwestern area of Shanghai (Minhang and Meilong) suddenly became a popular choice for a lot of Shanghai citizens,” said Henry Fang, a senior research manager at Cushman and Wakefield  Shanghai. “A mass of middle and high rise residential buildings were built along the subway line forming some of Shanghai’s largest local residential areas.”

Fifteen years on, subways stretching across Shanghai continue to shape the city’s residential areas, but to a lesser extent. According to Kitty Tan, associate director of research and  development at Savills Shanghai, additional factors such as reasonable housing prices, improved hospitals and schools and the development of out-of-town office parks and suburban retail projects have all persuaded people to move out to the suburbs.

Additionally, extra subway stops have encouraged expansion of retail and commercial sites in suburbs like Xinzhuang and Zhongshan Park. These, in turn, have created attractive residential clusters for prospective buyers.

But is proximity to a subway station still a priority for buyers now that so many are springing up across the city? The answer appears to be a resounding no.

“The convenience of a subway line is always a selling point for residential properties,” said Fang. “But people also take into account good schools and neighborhoods. If nearby support facilities such as restaurants, supermarkets, drugstores and parks are insufficient, people are reluctant to move into the area even if a subway line is available or being planned.”

Some potential buyers are even put off by properties near subway lines, as they bring unwelcome traffic and construction.

And some Shanghai residents don’t even use the subway. As Tan pointed out, the subway is still in its infancy. “A number of other forms of transport such as the public bus system or, more and more so, the private car still carry the majority of the commuting population.”

Residential prices today are not so affected by the presence of subways. When Line 1 was extended to Xinzhuang in 1996, prices soared. They now average in the region of US$1,000-1,300 per square meter.

But when Shanghai’s biggest metro transfer hub – Century Avenue Metro Station on Line 2 was reopened after a year’s renovation at the end of October 2006, prices of properties nearby did not change significantly.

Destined to grow

Shanghai’s sprawling subway map looks set to spread out in all directions in the near future, reaching suburbs on the east and west banks of the Huangpu River. Pudong certainly looks set to benefit from the expansion of Lines 2, 4 and 6, but in Fang’s opinion, the new metro network will not push the growth of residential development in any one particular district.

The metro system is an important infrastructure of any major city and the daily slog of getting on an early morning subway remains an inevitable delight of urban modern life. But in Shanghai, no matter how far the subway lines sprawl, they will not be the deciding factor in the residential preferences of its inhabitants.