Through my Executive-MBA at Saint Mary’s University in Halifax I find myself at a reception at Tongji University, Shanghai.
No matter where I travel, it seems if you are in real estate sales, you get asked the universal question. “What do you think of the local real estate market?”

This happened to me yesterday, and in all places, Shanghai. Through my Executive-MBA Program at Saint Mary’s University and a business trip arranged by Saint Mary’s to the other side of the world, I found myself at a reception at Tongji University, Shanghai. We met with 20 or more Shanghai International MBA students and faculty. It was an intimate reception on the Tongji University Campus. A few speeches, a couple of presentations by our class business groups and then a Chinese buffet.

In the middle of the reception I was introduced to Dr. Jianwie Wu, a professor at the School of Economics and Management at Tongji. How he found out I was a Realtor is a mystery. His great interest of me was how I saw the Shanghai real estate market and more specifically where the top may be. Apparently he has invested well in real estate and in the past couple of years his holdings have risen 200%. He wanted to know what economic indicators I would use to predict the top of the market for his holdings? A straight forward enough question!

Now, having been in Shanghai for all of 24 hours and not having the faintest idea about the market, I would say I hadn’t any idea where the market was going to go, The little I do know of Shanghai real estate, is real property ownership is legal and encouraged. Fair trading exits and companies like Cendant, who own Century 21 and Coldwell Banker want in a big way.

I hesitated and answered that I didn’t have access to that crystal ball. My new friend Dr. Wu looked a little forlorn that a Canadian real estate broker couldn’t add any insight to his question. Somehow I found myself slipping in my role as a Realtor and started asking Dr. Wu some questions. Did he want to know when the market was topping out so he could sell? Would he reinvest in real estate right away? Were his holding making money? Dr. Wu considered all of this and gave me a few answers. Apparently his holding were all inside the inner ring road. Again from what little I do know, inner ring real estate is hot! But he pressed to ways to know the market was topping off. Suddenly, I found myself formulating an answer. I told him to watch the Shanghai GPD index. Watch for weakness predictions, a sign that the top is near. Monitor the Shanghai labour index, again watch for pull-backs. Look at the construction association reports to see if there is a predicted time Shanghai may meet the housing demand or + number vacancy rates. I told him any combination of these indexes or economic indicators may signal a pull-back in real estate values. Lastly I told him to watch actual sales, track historical costs, quite soon there may be enough organized real estate data to help him with this. Whether I really helped Dr. Wu, I don’t know. However he seemed satisfied with my answer and moved on.

The amazing thing was, I was 7,198 miles from home and stuck in the middle of a reception and was being asked the same questions I get when I am home.

Next we are off to Ho Chi Min City, Vietnam, to another reception tomorrow night. I can almost predict the conversation I am going to have.

T.H.

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