All Foreigners Gone from Shanghai? Luxury Home Prices Crash 73%, Rents Back to 2013

The foreigners have all left. You barely see any foreigners in this complex anymore. It has had quite an impact on owners who rent out their homes here. These villas used to get rented as soon as they became available. Most went to executives at foreign companies. But things are different now. You could say rents here are back to where they were in 2013. The unprecedented quiet extends beyond the traditional upscale neighborhoods of Puxi. It has also reached luxury communities in Pudong, including the Link's American-style villa development and Emerald, both known for their established expatriate communities. When I first came to this neighborhood over ten years ago When I first came to this neighborhood over ten years ago When I came to this complex more than a decade ago, you could still see lots of foreigners out on the streets with their children. Now, almost all of them have left. That has had a huge impact on landlords here. Homes used to get rented as soon as they became vacant. One person commented online that fortunes really do change. During the Asian financial crisis in 1998, foreign investment poured into China. Now in 2026, it's pouring into Southeast Asia instead. Shanghai, China's showcase of international business and a major gateway for foreign investment, is experiencing an unprecedented retreat. The first market to feel the chill was ultra-luxury housing rented to expatriates, once known for its sky-high prices. Rents have fallen back to 2013 levels almost overnight. This reflects more than an imbalance in housing supply and demand. It also offers a snapshot of the broader withdrawal of multinational capital from China. Generous housing allowances for executives posted to China once supported demand for luxury villas in areas such as Pudong's Biyun neighborhood and the Shijiao State Guesthouse District. These homes routinely rented for up to 100,000 yuan a month. They were in such high demand that they rarely sat vacant. They also supported an upscale expatriate consumer economy, centered on amenities like Dulwich College and golf clubs. But geopolitical tensions, a tightening business environment, and the restructuring of global supply chains have prompted many foreign businesses to leave China entirely or move their headquarters to countries such as Singapore. As overseas assignments disappear and executives move home with their families, once-coveted detached estates are piling up on real estate platforms. Even deep rent cuts have failed to attract tenants. With the departure of affluent expatriates who spent a million yuan or more a year, the international schools, premium health care providers, and expatriate services face an irreversible erosion of their foundations. The striking decline of Laowai Street, or Foreigner Street, is one of the clearest, most tangible signs of this foreign investment exodus. The people have gone with the ebbing tide, leaving Foreigner Street cold and quiet. Businesses once thrived along the street. Now hardly anyone comes. Waves rise and roll, then retreat to leave an empty shore. The world keeps changing, and past prosperity is hard to bring back. This widely circulated popular verse captures the transformation of this distinctive stretch of Shanghai's Hongmei Road. It has resonated strongly online with countless Shanghai residents and people who experience the neighborhood firsthand. All the foreigners have left. Of course it feels deserted. I went there last night at 9pm, right when the night life should have been getting started. There wasn't a soul around. Every place was empty. Restaurants, bars, barbecue spots. Go see for yourself if you don't believe it. Others compared the streets past with the present. This tiny crowd is nothing like it used to be. There were so many foreigners in Shanghai before the pandemic. The number now is less than 10% of what it used to be. Some long-time Shanghai residents lamented that even many young locals have almost forgotten that the street exists. It's nothing like it used to be. My friends are surprised to hear a foreigner street is still there. The street's rise and fall is almost a miniature history of China's economic ties with the outside world. Less than 1,640 feet long and formerly known as Hongmei Leisure Street, it has a vintage locomotive. Numbered 101 at its entrance, a reminder of its celebrated beginnings. Around 2002, China had just joined the World Trade Organization. It was a golden period when reform and opening brought in large amounts of foreign investment. Multinational executives and foreign investors arrived in Shanghai with substantial capital and made handsome profits as the economy expanded rapidly. With generous international salaries and overseas allowances, they needed a place to dine and socialize that fit their Western lifestyles. Foreigner Street emerged to serve two established expatriate communities nearby, Gubei New Area and the Hongqiao Economic and Technological Development Zone. Over the next two decades and more, the narrow lane rapidly transformed. It brought together authentic cuisines from more than 10 countries. Foreign chefs and owners personally ran more than half of its specialty restaurants and pubs. One person who experienced these golden years recalled online, I went there often before 2018. It really shows the prosperity of China's growing economy. There were people of all different backgrounds and skin colors everywhere. The whole street was packed, buzzing with conversation. For certain countries' national holidays and special festivals, restaurants along the street had to be booked far in advance. From afternoon business meetings to late-night gatherings over drinks, laughter and music filled the neighborhood, making it a vibrant symbol of Shanghai's Why is international character? Yet that prosperity came to an abrupt end in just two or three years. As multinational capitals strategically withdrew and foreign executives left together, the expatriate customer base on which Foreigner Street depended suddenly disappeared. To revive the declining neighborhood, local administrators funded several rounds of renovation. They introduced creative markets, a pet park, immersive theater, and craft beer bars, hoping to bring younger local customers. But after losing its core clientele, the street could not reverse its decline. On an ordinary day, the neighborhood is silent, with only nearby residents slowly walking their pets near deserted railroad tracks. Looking at the desolation, one person online commented, Now that the national confidence is up, foreigners are no longer in demand. Those who witnessed the change understand that Shanghai will not regain its former prosperity. If the departure of foreigners can be seen as normal risk management by multinational investors, the panicked departure of Shanghai's own wealthy residents reveals a broader collapse of confidence. It seems that China's private business owners and wealthy elite are losing faith in the current system. Luxury homes in Shanghai's prime locations were once considered among China's most resilient assets, valued for their ability to hold their worth. Even as housing prices in second- and third-tier cities elsewhere fell by half, wealthy buyers still viewed spacious riverfront apartments in Shanghai's inner ring road as the ultimate safe haven. Recently, however, that faith in And Prime Assets has been shattered. Listings on major real estate platforms show a surge in high-end properties offered for sale in Shanghai's prime neighborhoods in recent months. Several measures have reached all-time highs, or their highest level in years. Listings at Shimao Riviera Garden, a landmark luxury riverfront development in Pudong's Lujiazui, have surged to 235, an eight-year high. Listings at Yanlord Garden have climbed to 89, the highest in years. At Yanlord Town, considered the top end of housing for the middle class and newly wealthy, listings have exceeded 120. Prime assets are flooding the resale market. Owners who once held back, reluctant to sell, now share one goal, cash out as quickly as possible at any cost, and then sever the remaining ties to assets in mainland China. Shanghai housing prices are plunging faster than a high dive. A luxury riverview home in Pudong's Lujiazui is down 73%. It includes an 860-square-foot terrace overlooking the river. Originally priced at 15 million yuan, about U.S. 2.1 million dollars, it is now being sold off for 5.56 million yuan, about U.S. 778 thousand dollars. Such steep drops are no longer isolated cases in the resale market for luxury homes. Internal listings and social media accounts used by Shanghai's luxury property agents are filled with almost identical sale descriptions. The owner's entire family is emigrating, settling in Vancouver, already back in Singapore. Returning to Hong Kong or Taiwan for work and leaving Shanghai for a job transfer. Beyond the vast majority of these listings is a wealthy family determined to leave and eager to cut its ties. They need to turn their assets into cash and move their money abroad in a very short time. Landlords, once worth tens of millions or even hundreds of millions of yuan, are showing unprecedented willingness to compromise and desperation when listing their homes. Asking prices are often cut in half, with some willing to accept almost any offer. In Xuhui District, an owner bought a high-end apartment with permanent ownership rights for 11.8 million yuan in 2025. They spent another 1 million yuan on carefully designed artistic renovations. After living there for only a few months, the owner listed it for a fixed 6.5 million yuan, explicitly refusing negotiations. Their family was settling in Vancouver, Canada. In Minhang District, an owner preparing to emigrate with the entire family listed a quality apartment bought for 7 million yuan at just 4 million yuan. The family had never spent a single day there. The owner accepted the steep loss simply to receive full payment quickly. In Huangpu District's East Nanjing Road shopping area, a spacious duplex bought for 20 million yuan was listed for 11 million yuan because the owner urgently needed money to leave the country. Renovations had been completed less than six months earlier, and the owner had lived there for only 12 days. Nearly half its value had disappeared. A high-end property in Yangpu's North Bund area, originally listed for 8.15 million yuan, was cut directly to 4.5 million yuan for a quick sale after its owner settled in Singapore. Even more telling is the rush to sell landmark luxury properties in the most desirable neighborhoods. In Huangpu's central Bund area, a luxurious four-bedroom apartment at China Resources Bundside has about 2,657 square feet of gross floor area. It would normally be a scarce property that luxury buyers compete for. Yet its owner's approach to selling reveals extraordinary Anxiety. The agent wrote, I just met with the owner at the Bundside. This time, the price really has been cut to an all-time low, a price we've never seen before. The owner has been living abroad for some time now, and the home is vacant. They no longer plan to keep it. They've cut the price directly to around 10,840 yuan per square foot, and they specifically want us to sell it as quickly as possible this week. Their determination to sell is remarkable. That urgency to sell as quickly as possible within a week vividly illustrates the intense anxiety wealthy owners now feel. Wealthy Hong Kongers and Taiwanese are also accelerating sales of their mainland assets. In Putuo's Changfeng area, a Taiwanese owner cut the price of a property bought for 6 million yuan to 3 million yuan. His entire family was returning to Taiwan. In Minhang, a Hong Kong owner reluctantly offered a luxury villa bought for 19 million yuan for just 11.8 million yuan. Another owner in Huangpu listed a spacious apartment bought for more than 21 million yuan for a quick sale at 10.8 million yuan, roughly half the purchase price. The reason was the same, leaving Shanghai for good and returning home to settle. Luxury homeowners are discovering to their alarm that even after voluntarily cutting prices by millions or more than 10 million yuan, Very few buyers can actually afford to take these properties off their hands. Wealthy owners are accepting such punishing losses because they recognize that the policy window for cashing out and leaving the country safely is closing rapidly. As foreign businesses uproot their supply chains, the domestic business climate and confidence in the rule of law have hit rock bottom. Property owners have lost their sense of security about the future. Now, a downward spiral in property liquidity has become unavoidable. In a recent public assessment, prominent economist Fu Peng highlighted an even harsher underlying reality. Expectations that the property market will stabilize are unrealistic. Widespread price declines of 40 to 50 percent in China's major cities are only the beginning. As broader economic conditions develop, the most serious problem will be more than a prolonged slide in prices with no clear bottom. It will be the complete loss of the ability to sell assets. Beyond collapsing expectations and wealthy residents leaving the country, a more immediate and damaging force is driving Shanghai's historic luxury housing sell-off. The Chinese Communist Party Authority's tax collection campaign. Covering every stage of offshore trusts, with public finances severely depleted, regulators have targeted the overseas safe havens of China's top entrepreneurs. Wealthy people already facing cash shortages are being forced to dump stocks and sell luxury homes at steep discounts to raise sums for their tax bills. On July 24th, China's Ministry of Finance and State Taxation Administration jointly issued Announcement No. 21 of 2026. It's titled the Announcement on Matters Concerning Individual Income Tax on Offshore Trusts. It overturned the unwritten rules governing overseas wealth structures that Chinese business owners had used for more than a decade. Entrepreneurs with companies listed in the United States or Hong Kong, along with ultra-wealthy individuals, had commonly placed listed company shares into offshore family trusts established in the British Virgin Islands, the Cayman Islands, or Singapore. This allowed them to pass wealth to the next generation. Separate assets from other liabilities and defer taxes. The new rules, however, use look-through regulation to dismantle those tax avoidance barriers. They explicitly bring all three stages of offshore trusts into the tax system, contributing assets when a trust is established, distributing dividends during its life, and liquidating it at termination. A uniform individual income tax rate of 20% applies. Even more alarming for the wealthy was the brief 90-day transition period with a final deadline of October 22, 2026. Authorities stipulated that anyone who voluntarily calculated unpaid taxes and completed the required declarations before the deadline could avoid penalties and late fees. After that deadline, a daily late fee of 0.05% would apply. Tax authorities would also immediately open investigations, place offenders on blacklists, and publicly expose serious cases, potentially pursuing criminal liability. China State Taxation Administration disclosed on October 11th that more than 160 billion yuan in taxes had been declared during the 90-day offshore trust tax campaign. One financial vlogger reacted. That's insane, one of the country's top billionaires paid 160 billion in back taxes within a month. That's staggering. The country's richest people paid 160 billion yuan in back taxes in just one month. The State Taxation Administration just announced that the 90-day transition period for offshore trust taxation has officially ended, with more than 160 billion yuan in individual income taxes declared. In October alone, 120 billion yuan was collected, pushing nationwide individual income tax growth that month to nearly 90 percent. Two figures stand out. 160 billion yuan and nearly 90% growth in individual income tax revenue. Many people cannot picture what 160 billion yuan means. Most companies listed on China's A-share market do not earn that much in net profit in an entire year. Most prefecture-level cities have annual GDPs of only that size. This tax campaign targeted the wealthy precisely. Giving them just one month to pay back taxes was enough to drive nationwide individual income tax growth to 90%. Whether it's the government collecting taxes or ordinary people running businesses, the same principle applies. Earning money from the wealthy is far more efficient than collecting small amounts from everyone. Authorities portray the campaign as an effort to promote tax fairness and regulation under the law. Behind that narrative, however, China's business elite face serious distress and fear as their available cash is drained. Research by Boston Consulting Group puts offshore wealth held out of sight overseas at $1.7 trillion for wealthy Chinese individuals. Bloomberg data also shows that at least eight Chinese technology and business leaders hold about $140.2 billion in shares of overseas-listed companies through offshore trusts. They include NetEase's Ding Lei, Pinduoduo's Huang Zheng, and Xiaomi's Lei Jun. But a basic financial fact is overlooked. Top entrepreneurs may be worth tens of billions of yuan on paper, yet most of their wealth is in listed company shares and real estate. Their bank accounts often lack the cash reserves needed to cover a sudden, enormous tax bill. The scramble to raise hundreds of millions of yuan in cash before the October 22 deadline triggered a severe wave of panic selling in capital markets. Restaurant chain Haidilao founder Zhang Yong and his wife Xu Ping offer a clear example. On September 8, Xu rapidly sold 259 million shares through a family trust at a 6.7% discount. She raised about HK$2.75 billion. Hong Kong dollars. On October 12, Zhang himself applied to the listed Heidi Lau Company for an emergency short-term loan of HK$100 million, repayable in just 30 days. Its purpose was vaguely described as a personal financial arrangement. Market institutions generally estimate that the couple could owe nearly 1.9 billion yuan in back taxes. Boss Zhuping founder Zhao Peng raised about $110 million through stock sales in September. Zhu Weisong, controlling shareholder of listed collectible toy company Blocks, sold shares at a discount on the October 22 deadline itself, reaching about HK$251 million. Hong Kong dollars. That directly sent the company's stock down 21% in a single day. Zhujian founder Luo Min was also revealed to owe 790 million yuan in individual income tax, an amount equal to nearly one-third of his company's market value. Adding to wealthy individuals' despair are the timing mismatch and retroactive taxation embedded in the new rules. When calculating tax on assets contributed to trusts, tax authorities often use valuations from 2014 to 2020. When Chinese companies listed overseas were at historical peaks, those high market values translate into enormous tax liabilities. By 2026, however, valuations of China's internet companies and other industry giants have often fallen by half, or even more than 70%. Authorities are nevertheless requiring wealthy owners to produce actual cash within a very short time based on their peak paper wealth. Many entrepreneurs are painfully discovering that even selling every share they own might not cover the taxes calculated for those earlier years. Facing these sudden, burdensome tax bills, many have tried changing nationality or obtaining residency status in Hong Kong or Singapore. But China's tax system uses the Common Reporting Standard, or CRS. CRS allows for automatic exchange of financial account information, together with large-scale data tracking to look through ownership structures comprehensively. Anyone whose main economic interests came from mainland China is classified as a Chinese tax resident. A partner at the law firm, Charles Russell, put it bluntly, this net reaches so deep and so wide that almost no one can escape. State media have also recently stepped up signals of further action. Former senior central bank official Guo Shuqing published a major article explicitly calling for inheritance tax legislation. He proposed directing all revenue from taxes on wealthy people's capital and transfers between generations toward the enormous shortfall in basic pensions. This suggests the 160 billion yuan offshore trust collection is only the beginning, with a larger reckoning for private wealth still ahead. Several international legal experts and political analysts say that as collapsing land sales push local finances into a severe crisis, Beijing's sudden retroactive collection of hundreds of billions of yuan amounts to authorities reaching abroad to seize private capital while exhausting their own credibility. To pay their taxes, wealthy owners are dumping shares on the secondary market, draining funds from stocks. They're also selling property at steep losses and unloading luxury homes, while seeking every possible way to move their money and families to safer Western countries. This open disregard for property rights is driving some of the most innovative people into exile and flight. Shanghai has long been a pillar of China's economy and public finances. It accounts for about 4% of the national economy and is a crucial source of revenue, supporting central government transfers to other regions. For decades, as long as Shanghai's economic engine kept running, people believed China's broader economy still had room to maneuver. But with foreign investment retreating sharply, private entrepreneurs losing hope, asset markets suffering panic-driven collapses, and local fiscal systems breaking down, Shanghai faces a sweeping decline in 2026. This is more than a decline of one megacity. It signals a profound crisis for China's entire economic system.