Eliza Wong
The Luxury Property Downturn in Shanghai
Last week, Wang Sicong’s 406-square-meter garden duplex at CapitaMall Maoming Residence in Shanghai was close to being sold, but the buyer backed out at the last moment. Listed for a year, the asking price for this luxury property dropped from nearly 100 million yuan to 61 million yuan, bringing the per-square-meter price down to 150,000 yuan. To put this in perspective, in 2022, similar units in the same complex were transacting at 350,000 yuan per square meter.
A decade ago, Wang Sicong purchased this luxurious property on Huaihai Middle Road in Huangpu District for 63 million yuan, with an additional 22 million yuan spent on renovations, bringing the total cost to 85 million yuan. Over the past ten years, Bitcoin surged from $200 to over $100,000, gold rose from 200 yuan per gram to over 700 yuan, and China’s A-share market nearly reclaimed the 4,000-point mark. Meanwhile, Wang’s property lost over 20 million yuan in value.
Before Wang’s case, luxury developments like Cloud Nine, The Riviera, and Fuxing Longyu had already seen valuations drop by at least 30% from their peaks. Similarly, villa areas in Xijiao and Dongjiao experienced comparable declines. Even the once-stable Gubei One recently saw a foreclosed unit sold at a 30% discount. Coincidence or not, Shanghai’s property market has been on a downward trajectory since Wang’s departure. Now, his failed sale has dealt another blow to the city’s real estate sector, signaling that Shanghai real estate is undergoing a significant valuation correction.
The Rise and Fall of a Symbolic Figure
Thanks to numerous live streams by Wang Sicong’s former girlfriend, Xiaoyu, his CapitaMall Maoming Residence property gained significant public exposure. During that period, Wang was eager to showcase his lavish lifestyle, flaunting a 1.03-million-yuan computer and the world’s first Sony Z9D TV, worth 1 million yuan, in this very apartment.
Today, the Sony TV has been moved to Tokyo, and his fleet of luxury cars, including a Bugatti Red Dragon, Rolls-Royce, and Porsche, now sport Tokyo license plates. He was photographed undergoing immigration procedures in Japan, and rumors suggest he purchased a 1.5-billion-yen luxury apartment in Tokyo’s Omotesando district.
When Wang Sicong bought the CapitaMall Maoming Residence a decade ago, it was the best unit in the complex. Now, however, it remains unsold, with perceived flaws such as corporate ownership, ground-floor location, insufficient ceiling height, and even the garden being viewed as disadvantages. Interestingly, across the street from CapitaMall Maoming Residence is Vanke’s upcoming Gaofuli development, where mid-to-high-floor units are priced at over 200,000 yuan per square meter, and lower-floor units start at 170,000 yuan. Their core selling point? A genuine ‘Wutong District’ location.
Despite both properties being in the same prestigious area, they tell entirely different stories. Before 2019, Wang Sicong was one of Shanghai’s most prominent figures—a northern native, the only son of a billionaire, an entertainment entrepreneur, a regular at the Peninsula Hotel, a red Rolls-Royce owner, and a man surrounded by beauty. His lifestyle epitomized Shanghai’s status as a financial, consumer, and international hub.
His ventures, including Banana Project, Panda Live, and Prometheus Capital, thrived in Shanghai, earning praise for their innovation and investment acumen. However, post-2019, crises emerged across the board. Increased regulatory scrutiny in the entertainment, gaming, and live-streaming industries may not have been coincidental.
In March 2019, Panda Live declared bankruptcy. From July to October, equity in several of Wang’s companies was frozen by courts, including the parent companies of Banana Project and Panda Live. The collapse of Panda Live triggered numerous investment disputes and debt issues. Investors in Prometheus Capital initiated arbitration against him, leading to Wang being labeled a ‘laolai’ (deadbeat) and placed under court-ordered consumption restrictions.
In April 2022, Wang Sicong’s Weibo account vanished entirely. Prior to this, his activities and appearances in northern China increased significantly. By November 2023, he appeared in a turtleneck sweater at the signing ceremony for the Taishan Cultural Tourism Project between Huanju Commercial and the Taian government. This year, the seat next to Taian officials was occupied by Ho Yau Kwan, son of Macau gambling magnate Stanley Ho.
The New Shanghai Narrative for Zhejiang and Jiangsu Tycoons
Recent land auctions in Shanghai have been celebrated by local media as a comeback for private enterprises. Qingpu New Town and Minhang Zhuanqiao plots were secured by Yucheng Group and Changjiang Jinggong, respectively. Changjiang Jinggong, a steel structure company, hails from Lu’an in Anhui Province, while Yucheng Group, a real estate developer, is based in Huzhou, Zhejiang Province.
Earlier, the Ye Huabiao family, known as the ‘king of automotive molds’ from Taizhou, Zhejiang, acquired the nation’s most expensive land plot in the Hengfu area. Among Shanghai’s luxury property buyers, the proportion of individuals with identity cards starting with 320 (Jiangsu) and 330 (Zhejiang) is steadily rising. Shanghai’s new and secondary housing markets have diverged into two distinct worlds.
In the secondary market, the dominant theme is price declines, while the primary market buzzes with price increases. Pessimists buy second-hand properties; optimists invest in new developments. These two groups operate in separate realities, perceiving the economy through entirely different lenses—optimists see growth and inflation, while pessimists see decline and contraction.
In recent years, Shanghai has implemented measures to segregate these groups. Halting sub-center development in favor of the ‘One River, One Creek’ initiative is one such measure. Lifting purchase restrictions outside the Outer Ring Road is another. On August 14, Beike’s decision to hide secondary market transaction prices further reinforces this division.
In May of this year, Shanghai’s urban investment company purchased the Dong’an New Village plot for 43.9 billion yuan, setting a national record for residential land transactions. After three months of searching for buyers, they finally transferred the land to China Overseas Land and Investment (COLI) and China Resources Land.
A quick calculation reveals minimal profitability in the primary market: with 6,057 households in Dong’an New Village receiving an average of 7.5 million yuan in relocation compensation, margins are slim. Yet, shortly after finalizing the Dong’an deal, Xuhui District initiated the relocation of neighboring Jiangnan New Village, involving 2,500 households. Relocation efforts are proceeding rapidly—and addictionally.
In 2022, Fosun and Ant Group jointly purchased the Fuyou Road plot near the Bund for 12.93 billion yuan. Fosun was the sole bidder, partly due to the high commercial ratio and government-imposed tax conditions: 12 billion yuan in tax contributions before project acceptance and 14.4 billion yuan within five years after acceptance. Three years later, the project remains stalled, with no development plans or construction activity. The decade-long relocation process for Fuyou Road has left the area dubbed the ‘No-Man’s Land’ by locals, attracting photographers keen to capture the stark contrast between the bustling Bund and the desolate site.
Meanwhile, a villa project named ‘Yu Waitan’ has begun discreetly courting buyers, offering both commercial and residential villas under the slogan ‘The Closest Villas to the Bund.’ In recent years, Shanghai and other major cities have realized that selling luxury properties is the fastest form of investment attraction. The Huangpu River flows eastward, the Bund remains brilliantly lit, but a new cohort is now seeking to write the next chapter of Shanghai’s legendary real estate story.
Decoding Shanghai’s Real Estate Through Housing Provident Fund Data
When analyzing Shanghai real estate, one metric stands out: the Housing Provident Fund. China’s housing provident fund system originated in Shanghai. From 2012 to 2024, while the city’s total population remained largely unchanged, the number of housing fund contributors grew from 5.5 million to 9.5 million, and the number of participating units increased by 430,000. Essentially, these contributors and units form the backbone of Shanghai’s economy.
By 2024, significant shifts emerged. The number of units contributing to the fund increased by over 30,000—a positive indicator—but the number of individual contributors decreased by 130,000. Total loans issued by the Shanghai Housing Fund in 2024 rose by 14% year-on-year. However, a closer look reveals that the number of mortgage loans issued dropped by over 9,000 compared to the previous year, meaning the average loan amount per borrower increased.
In 2023, the average mortgage loan was 740,000 yuan; by 2024, it had risen to 950,000 yuan. This may reflect relaxed lending policies, but it also indicates that those committed to staying in Shanghai are taking on higher leverage. Purchase restrictions outside the Outer Ring Road have effectively vanished, and落户 (luohu, or household registration) rights have been delegated to leading enterprises in the Five New Cities. Recently, a company in Lingang offered special talent落户 packages for 700,000 yuan per family.
In 2024, Shanghai granted落户 to 80,000 individuals, with 36,705 obtaining residency through long-term residence permits. For two consecutive years, talent-based落户 has exceeded residence-permit-based落户. Shanghai is demonstrating its most open attitude in 30 years to attract young talent. Yet, one week after lifting purchase restrictions outside the Outer Ring Road, secondary market transactions showed little improvement.
Optimists are waiting for the U.S. to cut interest rates, anticipating capital outflows from America. In a curious parallel, Huang Yiming, who claims to have a child with Wang Sicong, has been seeking child support. She shared chat logs from October 2023, in which Wang told her, ‘Bear with it yourself. Once we get through next year, I’ll have money for you.’
Implications for Shanghai Real Estate and Future Outlook
The ongoing valuation correction in Shanghai real estate reflects broader economic trends and policy shifts. The polarization between new and secondary markets underscores a deepening divide in buyer sentiment and financial capacity. While luxury properties face significant headwinds, strategic developments in prime locations continue to attract high-net-worth individuals from Jiangsu and Zhejiang.
Government policies, from tax incentives to relaxed purchase restrictions, aim to stabilize the market and attract investment. However, the effectiveness of these measures remains to be seen, especially as global economic uncertainties persist. The housing provident fund data reveals underlying challenges, including declining participation and increased borrower leverage, suggesting that even committed residents are feeling the strain.
For investors and homeowners, the key takeaway is the importance of strategic location and timing. Prime areas like the Bund and historic Wutong districts retain their appeal, but buyers must navigate complex regulatory and market conditions. As Shanghai continues to evolve, understanding these dynamics will be crucial for making informed real estate decisions.
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