For anyone who has spent any amount of time trying to find an apartment in Shanghai, the following is obvious: The central Puxi areas are the most expensive. Xuhui, Jing’an, Luwan, and anything around the main sections of Nanjing Lu and Huaihai Lu. On a map, you can cover the most expensive swathe of Shanghai if you draw a diagonal line from the Bund to Xujiahui. Anywhere near Nanjing Xu Lu, Xintiandi, IAPM (South Shaanxi Metro Station), or Yongkang Lu appears to be the most expensive.

Run your cursor over the image to view the data.

The key takeaway from this, however, is how significantly prices drop when you move away from these high-demand areas. Once you start moving north or west of Jing’an Temple, for example, prices for rentals start to drop dramatically. Rental prices near Changping Lu, Jiangsu Lu, and even West Yuyuan Lu are 20% to 30% cheaper than apartments in central Jing’An and Xuhui — an apartment the same size and a few blocks west is 20% to 30% cheaper.

For example, looking at our map, the median price for a 2-Bedroom apartment near Jiangsu Lu Metro Station is 10,350rmb, compared to the 14,500rmb median price near Jing‘An Temple, a neighboring area, just one metro stop away.

Other areas I find interesting are what I call border districts. These are areas on the border of Western-friendly central Shanghai and before the concrete high-rise sprawl of Shanghai’s surrounding areas. These border districts include Changping Lu, Jiangning Lu to the north, and Jiashan Lu, and Dupuqiao to the south. These districts are interesting because just by crossing one street you see drastically different prices.

The Takeaway

For the best deals, start looking in border districts — areas between Shanghai’s dense central areas and the outer neighborhoods. That’s where the best deals are. Changning District, in particular, the area west and north of Jing’an Temple, offers cheaper rents without too much sacrifice in terms of distance from the center of town.

If I made a ranking of the factors that determine apartment rents it would be:

• Square meterage
• Amenities, furnishings, and “niceness” of the apartment
• Location
• Individual circumstances

Square meterage is the prime factor by far. Square meterage is very strongly correlated with the price of the apartment, with larger apartments commanding relatively more rent. You could build a fairly accurate model that predicts apartment prices just by using the size of the apartments alone. The number of bedrooms does not provide any further influence on price. The same goes for the number of bathrooms. The same goes for kitchen size or however, the rooms are split up in the actual four walls.

This is helpful because now we can calculate for each listing its monthly rental price per square meter and compare different districts using their apartment price per square meter. Apartments with a high price-per-square meter in a given area are either very nice and well-furnished or they are overpriced. This also helps us better compare districts (see below in Point 3).

Looking at Changshu Lu, for example, one of Shanghai’s most expensive areas in the middle of Xuhui, on average the price-per-square meter is 165rmb, meaning a 60sqm apartment in Changshu Lu will cost you 9,900rmb per month.

If you are paying 12,000rmb a month for 60sqm, you are paying 200rmb per square meter. Either you have a very well-furnished apartment with nice amenities, or the apartment is in a historic building, or you are overpaying. In the Changshu Lu area, 200rmb per square meter is in the top 15% of price-per-square-meter apartments.

Of course, the quality of furnishings, style, and amenities are hard to quantify from listings data. Only you yourself can justify whether a high price per meter or a lower price per meter suits the apartment you are looking at.

For example, my apartment near Jing’an Temple was 4,500rmb a month for a 40sqm, 1-Bedroom flat. This comes down to 112.5rmb per month per square meter, significantly cheaper than the average 150rmb per month per square meter apartment in the same area. Part of the reason I was paying so little is that: 1) the landlord was just managing property for an overseas family and didn’t care about money, and; 2) the kitchen is separated from the main room by a flight of stairs.

The Takeaway

The overall size of your apartment is the key factor for determining its rent in a given area, with secondary amenities influencing the price over or under the median in a given district. A 1-Bedroom apartment commands the same rent as a same-sized 2-Bedroom apartment. Focus on a given size you are looking for and know the median price of this size in a given area.

Here’s the breakdown of the average price per square meter by area:

This data can serve as your starting point, showing you the average price per square meter in a given area. You can use this to know how much you should be paying. Then you can calculate the deviance of the asked rental price from this market price. Am I being charged too much? What am I getting with the higher price? Or are they under-selling it? Then the “really good deals” become more obvious.

Revisiting the Changshu Lu plot above, there is a large variation in price per square meter for a given area. The standard deviation in price per meter is between 30rmb and 40rmb per square meter. This means that if you’re lucky and you find an apartment in the bottom 15% of the price per square meter in Jing’an Temple, you will pay 6,500rmb a month instead of the average 9,000rmb a month. If you are very lucky and find an apartment in the bottom 2.5%, you could be paying 4,400rmb for a 60sqm apartment in a great location!

Of course, it’s likely you are giving up some amenities and overall quality, but I think the main point is:

If you look hard enough and are patient you can find significantly underpriced apartments.

Interestingly, this is one area on the outskirts of Shanghai that doesn’t have much to offer. If you go up north to Changning Lu or Zhenping Lu, the variability in the quality of apartments starts to diminish and the price-per-square-meter seems more standardized. The standard deviation for price-per-square-meter is 20rmb per square meter in those areas. I suspect this is because the high-rise apartment buildings in these areas are developed by a handful of companies and apartments are more standardized.

The Takeaway

There are good deals for people with patience and a lot of luck. The key is knowing what you should be paying where, comparing this with the asking price, and then rating this deviance against your own personal expectations of satisfaction with a given apartment’s amenities.

I think people tend to believe that lane houses (AKA laofangzi 老房子 AKA no-elevator walk-ups) are cheaper and that lane houses are more likely to be really, really nice or really, really squalid. So they have higher variability in quality.

This might be true when you compare central Shanghai to areas outside of central Shanghai. But in central Shanghai in the high-demand areas, neither point is true. For the first point, it’s true that 1-Bedroom or 2-Bedroom laofangzi are cheaper than places in apartment buildings. But this is only because laofangzi tends to be smaller — we revisit point 2. The smaller a place is the cheaper it is.

The graph also suggests that laofangzi and apartment buildings are just as likely to be overpriced or underpriced according to the mean. So you’re just as likely to find well-furnished high-rise apartments as you would find well-furnished laofangzi apartments. The same goes for underpriced or poor-quality apartments.

The Takeaway

High-rises and walk-ups command the same rental fees in Shanghai’s high-demand central areas. Choosing between the two is a matter of personal taste. The two types of apartments have pretty different styles and aesthetics, so it’s best to choose the apartment style that suits your preferences. You do not have to worry that you are overpaying or underpaying because you chose one type over the other.

• Not only are the cheapest places in the border districts of Shanghai but they also offer the best deals. As little as crossing a street will drastically reduce the rent.
• Always know what you should be paying for a given apartment size in a given area (the key determining factor), and then match the asking price with this number to see if you are getting a deal or are being over-quoted, taking into account that amenities and individual circumstances swing this number left or right of the median.
• There is a fair amount of price variation in each area, which is why when properties come on the market and they are underpriced, they are snapped up really quickly. Good deals are there for people with patience, tenacity, and working knowledge of the market.

1. Very, very cheap apartments (those priced at under 4,000rmb for 1-Bedroom apartments) are rarely listed, so any summary statistic below (median, average price) is a little bit skewed to a higher value — but not by much. If you want to find these apartments you can walk into an agency and ask. These apartments often have some sort of catch (shared bathroom most notably), whereas, with SmartShanghai’s listings, I analyze the standard, standalone apartments, not sublets.


2. The foreign rental market is on average more expensive than the market for Chinese renters. The biggest reason is that the makeup and salary of these two groups of renters are different. If we control for full apartments (non-sublets) the price for a 2-Bedroom a foreigner might find through an English-speaking agent is not going to be much higher than the price a local might find. If it is higher it’s likely possible you can negotiate to the same price point.