Following my last article about the new apartment I have some new developments to write about. First of all I am sorry that I didn’t manage to do so last weekend but some basic company related mess kept me away from writing anything. For everyone who doesn’t know about this apartment and does not want to read through the whole blog post from two weeks ago called “This and that” I will give you a quick summary.
My parents in-law are about to buy a new apartment in Xi’an. This apartment is roughly 25% cheaper for them through some reason I still don’t really understand, it involves somehow them being former workers at that factory which used to be on the grounds of that new apartment block. Two weeks ago I wrote that I am not too happy about them buying that apartment as it is first of all far away from the city center and second of all it would also mess up their daily lives as they need to commute everywhere by bus and thus making everything harder and more expensive.
For the past twenty’ish years they have been living right in the city center of Xi’an within the old city walls. Sure the area is not the prettiest around as the buildings haven’t been taken care of at all ever since their existence but it had some certain feeling to it as most neighbours know each other, on the streets in front of the buildings you can have all kind of delicious food, all kind of stores are all around there and it feels just real. In short it is for me the real Chinese city life, not those fancy malls or new skyscraper apartment blocks. My parents joked when they first saw the area that it looks like Germany after WWII (which my father even witnessed so there must be some truth to it). My in-laws apartment is in stark contrast to the outside of the building as everything was nicely renovated six years ago and everything inside is more “western” orientated with the basic Chinese kitsch to top it off.
The new apartment they want is in another area of the city which used to be an old industrial site. Apparently both of my in-laws used to work there (also the entire rest of the family as far as I know) and now they all got some nice discount on buying apartments there. My in-laws are planning to buy a 98m² (1055f²) apartment which would be about 1/3 bigger than their old one. Of course in China those 98m² are not actually the entire living space you buy as some of those m² are counted into the stairway and what not all so I believe the new apartment will be 85m² at most. Next to the new apartment buildings are the old buildings of the factory workers which are also in a terrible condition. There crazy granny still lives with crazy Uncle and his family (they already purchased the biggest available apartment in the new building). All around there is actually not much to do. There are not even many street kitchens, during daytime you can by only some watermelons from one vendor and there are some car repair place, nothing more. The nearest supermarket is 20 minutes away by walking so all in all it is not really a dream location.
Now to the apartment itself. The apartment is right now pretty much bare brickwork (okay it is concrete) without anything but some windows and the piping done. This means after you purchase such apartment you still have to invest tons of money. What else is not that great is the layout of the apartment which is in my opinion (everyone we asked) really bad, especially the kitchen is the size of a small storage room and I do not know how they will fit anything inside there. As they have installed already windows you can’t purchase yourself proper windows. In China the basic windows you get are some kind of “sliding” windows and they have as much insulation as a sheet of paper. All in all it is a real mess.
What is the new development when it comes to the apartment? You see my wife and I already convinced them to keep the old apartment as its value will increase a lot once plans are made for tearing it down and building a new apartment block there (not one of those ugly skyscrapers but something more traditional looking and not that high as it is within the city walls). After we brought our concerns forward regarding how hard life would be for them when living there they started to think about it themselves. MIL quickly realized that there would be no shopping for her any longer and that she would have to travel for over half hour to her dancing lessons and classes (half hour in case there is no traffic so it is more like one hour for a normal day). Also FIL would not be able to go to his table tennis sessions everyday as it would be the same as with his wife too: much traveling.
Right now they still want to buy that apartment but no longer want to live in it. They also do not plan on renting it out at all! They just want to buy it and leave it in its current condition. As they can get the apartment 25% cheaper they want to wait for a few years and then sell it with a nice profit. I must admit that I kind of like the idea especially as 300k RMB (~45k$) are not from their own pocket but from another source located in another country…
Would you move to such new location? What do you think about my in-laws new plan?
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As long as other people want the apartment someday, it sounds like a good plan. Do they have any idea if the surrounding area will be developed?
The surrounding area will be more devloped over the years. About the idea to sell it later, it seems that there is an estimation that the prices for that area will increase by 30% in the next 4 years so it would be a rather nice profit in the end as they get the apartment already 25% under its current value
I’m glad you talked them out of moving there. Buying with the idea of reselling might be good, but they will have to do some research and make some good guesses. China seems to be famous these days for building big complexes that no one wants to move into. It would be a gamble, but better than moving there.
There seems to be a demand for those buildings but then again I have the feeling that many are nearly empty for many years, at least I do not see any lights at night when walking past them.
We just hope it will all work out as it would be a nice profit for them/ us in the end
I say still – rent out, then sell – that’s what Momzilla does and she haven’t worked in like… 26 years? Also, they will focus on the apartment and maybe leave you alone for a while 😀
Not really a fan of renting it out either as getting the apartment into any liveable condition will be roughly 10-15k Euros and the renters will just trash it in the end so it is kind of wasted money + rent is so low that it wouldnt be profitable for at least 25 years.
If the rent is not really returning then yes, it’s not worth it. Just need to make sure there’s no water leaks or mold while no one lives there!
The rent is really not worth all the effort. I do wonder how things will turn out as MIL has the uncanny ability to change her mind dozens times per second.
It is so great to hear your in-laws are having second thoughts about living there. Keep the property and then selling it later sounds wise – hopefully that area will develop in the future or else it would be hard for the value to go up. LOL I didn’t think your in-laws lived in such traditional looking buildings – but good to hear the insides are renovated. Wouldn’t be surprised if the internal parts of the building like the pipes and what not get worn down over the years and always need replacing. Then again, some new apartments with shoddy handiwork can also suffer the same fate.
For some reason value of apartments are going up even when nothing happens in the area, basic China 😀
The building they live in is kind of…special. At first I was shocked but I got used to it and even appreciate it compared to those terrible new apartment complex which seem always so liveless and sterile
Lol, the older the thing, the more value it has, lasting the test of time. Like a fine wine..Sometimes some people think that way 😀 It would probably be a sad day when the old apartments get torn down.
Oh, that’s good to know that they’ve changed their minds. Having an extra apartment is always a good investment, especially if the area gets developed later on so it’s a win-win for everyone…:)
Thankfully value are going up in China even without any development in the surrounding area – at least for now. Who knows when the bubble will burst in China.
Right now I am just happy that they dont want to move there as I would also hate the idea to stay there each year for few weeks 😛
Hahaha, well, glad too know that you escaped from being subjected to the new flat then…;)
Oh I so agree with you guys that living closer to the city center is just so much more convenient. I have co-workers at work who live about 45 minutes outside of the city, and they can never drink at events and parties after work because they need to drive back. Inconveniences that might seem small but are big deals when you’re used to living nearby from everything. I think it’s a wise idea that your in-laws are planning in investing on a new apartment and later reselling it for a higher price. The old apartment neighborhood sounds vibrant and typical Chinese btw! I’d love to visit such area in China but I don’t even know where exactly Xi’an is in China, probably need to check the maps 😀
Xi’an is actually rather famous as it got the Terracotta Warriors and it is right in the center of China (used to be also the capital for few hundred years).
I also prefer living in the city center in case I have to live in a big city. Back in Helsinki I had an apartment just 15min walking distance away from the center, so it was just perfect (and very expensive)
Glad you convinced them to stay in the city center, it wouldn’t make sense to move after so many years. Hope the investment turns out good! I think the real estate bubble is going to last for a few more years xD
The real estate bubble better lasts for another 5 years 😀
Well, maybe if you visit, your family can take over the suite. 🙂 But clearly it would bore you and your family to be in area after 1-2 days. As you know here in North America, many people drive everywhere to do stuff. But not us. 🙂
It would be too expensive just to get the apartment into shape for us (it will be in a “raw” condition until they plan to sell it in a few years).
I think I will never understand people driving everywhere, especially within cities. Sure in North America it is a bit different due to the distances but still
Leaving it raw..interesting.
The plan sounds good, imho, but i’m not very familiar with chinese real estate. I think they could at least put some flooring, but i heard people like to renovate when moving into a new place anyways. [they could ask for a bit more because of the flooring, when times comes to sell it -assuming they buy it].
I learned that in China you can’t own a place for more than 80 years, so what will happen to their current place when that time is up?
No one knows yet what will happen after 80 years as people are allowed to buy apartment for much shorter time this far (I think it was I the 1980s). However they just can’t take the property away from the people as most have spent their entire savings on it! Let’s see how it all will turn out 🙂
Assuming a married couple in their late 20s buys an apartment, and they can own it just for 80 years. This means they need to live up to about 110 to find out what happens to the property… quite unlikely for this to happen in my opinion.
Indeed, guess we have to see what will happen in the next decades as later my wife will inherit the older apartments of her parents which they bought right after they were allowed to purchase them
Good luck with that!