Rents for expatriate housing in Shanghai have plumetted in the last few years -- probably by around 50 percent since 1995 when the market was at its peak.

The villa market has seen significant falls, but for quality developments with proven track records in terms of security and maintenance, prices have not come down much at all.

The majority of top-of-the-line villa projects are spread along Hongqiao Lu. Even a year ago, there were waiting lists for the top developments. Now, the lists have dwindled or disappeared. But occupancy levels remain close to 100 percent.

The reason is simple: they meet a need for family residences with a garden and good security close to international schools. There is a segment of the market that will not compromise on these issues.

Property analysts say people coming to live in Shanghai from the West or from expat-level homes in other Asian centers often have unrealistically high expectations on the quality and reliability of accomodation.

But things are changing in Shanghai because the growing stock of empty properties is forcing developers to pay greater attention to giving more for less.

There are still villas in the Hongqiao area with a monthly rental tag of $10,000 a month. But the range of choice for villas in terms of area and styles and prices is growing all the time, and there is increasing interest and competition for properties in the $3,000-$6,000 price range.

Rents for villas in the Pudong area, still viewed as being more out-of-the-way, are 20-30 percent lower than the Hongqiao area, although that will even up over the next year as the Pudong area becomes more central to all our lives.

Shanghai villa living is not for everyone. It seems to suit best two kinds of people -- expat families and local farmers. Villa-loving expats view the travel inconvenience of living on the outskirts of town as being well out-weighed by the advantages of fresh air, peace and quiet and plenty of elbow room.

The villas tend to be in closed compounds with round-the-clock security. There is usually a garden, no matter how small, and a garage. Somewhere down the lane, there's a clubhouse, tennis and squash courts and a swimming pool. One day the trees will also grow sufficiently to produce cool shaded lanes in these compounds. But at this point, the trees in most of them are still too small to make much of a difference.

Unit sizes range from 125 sq meters up to over 700 sq meters. Most are somewhere in the 200-300 sq meter range.

Many of the new high quality villa developments are in the Pudong area. Facilities on the eastern bank of the river are now improving quite fast, with school and highways pretty much in place. The Pudong international airport and the second subway line linking Pudong with Puxi are due to go into operation next year.

Tomson Real Estates' villa development, comprising 75 villas, has been fully rented out, and a second phase is planned, although it is understood the timing of construction is being re-considered until there is a better feel for the impact of the Asian financial crisis.

Four Seasons, a villa complex next to Thomson, and Shanghai Links are probably the top quality developments available at present.

Shanghai Links is a re-created American suburb on the Yangtze delta mudflats on the eastern extremities of Pudong. After a long wait, the first families have now moved into the development, which is designed in every way to make a standard American family feel completely comfortable and at home in the midst of an alien land.

Both the Tomson and Shanghai Links developments include golf courses, a major draw at the top end of the market.