Report Card

It's time for a little update on the numbers. This past September, the vacancy rate for Grade A offices has shot up to between eight and nine percent, compared to three to four percent a year ago. Within 2008, this rate has edged up from less than five percent to a staggering 11 percent from this time last year. Other than the "supply and demand" speculations, this might also be due to the fact that four projects in Pudong and Jing'an alone, completed in the third quarter of this year, introduced around 434,900 sq. meters of Grade office space. Combine that with construction in the first three quarters of 2008 doubling the total figure for 2007 and we've got a case on our hands. What's 2009 going to bring? 650,000 sq. meters more of such office spaces. But I hear that landlords are starting to offer incentives such as up to a period of six rent-free months to try to lure in tenants occupying an entire floor. On the upside, new home sales have picked up after the loosening of housing criteria that began on Nov. 1. First time buyers can now enjoy preferential mortgage policies such as a minimum down payment of 20 percent (decreased from 30 percent) and lower floor mortgage rates at 70 percent compared to 85 percent in the past. Let's see what kind of numbers game 2009 will bring.