Landed Newsletter No. 14 looks at new taxes in Vancouver and Hong Kong; tightening in Shanghai's red-hot property market; Airbnb in Singapore; a new Landed video and much more.
The Landed Newsletter highlights news and resources that you can use to make better real estate decisions, whether you are buying, renting or investing. With a focus on Asia and the Pacific Rim, The Landed Newsletter covers trends, legal and environmental developments and technology.
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To reduce the effects of a housing glut, the federal government will allow foreigners to buy new homes when other foreigners have a signed a sale and purchase agreement, but failed to complete the transaction.
In October, approvals to build new homes in Australia dropped 13% from month-earlier levels, the largest decline since mid-2012.
Bloomberg asks if Canada has seen the peak of its housing boom, noting that recent declines in brokers’ commissions echo those experienced before the crash in the United States.
Global News looks at the impact of legal homegrown marijuana on real estate, particularly a vendor's duty to inform a buyer that pot has been grown in a home.
Writing in the Times Colonist, Tony Gioventu introduces the new Civil Resolution Tribunal of B.C., an online service for resolving problems facing owners’ corporations, which are known as strata councils in British Columbia. The tribunal make it easier, faster and cheaper to resolve common problems, like the enforcement of bylaws and collection of debts.
Vancouver introduced an empty homes tax of 1% of the home's value, effective January 1, 2017. The tax is based on a self-reporting system and includes penalties of up to C$10,000 (US$7,500) per day.
Federal and Vancouver city officials released a coastal flood risk assessment plan (PDF, 8MB) based on three concepts: adapt, protect and retreat. The final concept would see vulnerable assets moved out of flood zones using opportunistic buyouts over the next 60–90 years, effectively abandoning parts of the city.
Ontario increased tax breaks for first time buyers, and made up for the lost revenue by increasing taxes on homes valued over C$2 million.
First-time home buyers in Shanghai must make a minimum down payment of 35%, up from 30%. Buyers of second homes must put 50% down, while anyone purchasing a nonstandard dwelling, such a villa or luxury apartment, must pay 70%. The authorities also tightened the definition of a first-time buyer.
The State Council released guidelines intended to strengthen private property rights in China. The guidelines call for improvements to the regulations governing expropriation and state that compensation in expropriation cases should be "fair and square."
Hong Kong raised the stamp duty on property transactions to 15%. The increase does not apply to Hong Kong residents who are first-time buyers or to nonresidential property. First-time buyers have already found a loophole: By purchasing several properties on single contract, they can avoid paying stamp duty on all of the homes.
Despite the stamp duty increase, adjacent apartments on the Peak set a new price record for Asia, selling for HK$104,803 (US$13,500) per square foot.
In November, 8,618 sale and purchase agreements were signed in Hong Kong, up 0.7% on October and up 82% year-on-year. Total consideration in November was HK$71.2 billion, up 8% on October and 139% year-on-year. In October, new home prices rose 2.6%, to a one-year high.
The Hong Kong government may introduce a program to encourage the conversion of industrial buildings into data centers and other applications. Many of Hong Kong's industrial buildings are illegally used for nonindustrial purposes and there are concerns that fires—like those that killed two firemen this summer—may result in mass casualties. On December 2, more than 30 people in died in a warehouse fire in Oakland, California.
In a surprise move, retired judge and candidate for the post of Chief Executive Woo Kwok-hing voiced his support for the controversial small house policy at a rally organized by the Heung Yee Kuk, the body representing Hong Kong's indigenous villagers.
A bill to legalize casinos—known in Japan as integrated resorts—was approved by the Lower House on December 2. Casino projects, which are seen as a major tourist attraction, are planned for locations throughout the country. The legislation could also affect Japan's pachinko parlors, where winnings are exchanged for cash in contravention of gaming laws.
Sumitomo Corp announced plans to invest ¥200 billion (US$1.8 billion) in real estate projects by 2020. The company will build mid-range apartment buildings and logistics facilities in Japan and is expanding its presence in India and Indonesia.
A massive sinkhole swallowed a five-lane road in downtown Fukuoka in early November. The sinkhole, which required 6,200 cubic meters of special soil to fill, began to subside again at the end of the month.
The government has increased the estimated cost for cleaning up the Fukushima nuclear site to ¥20 trillion yen, more than three times the original estimate. The government also said the higher costs would be reflected in consumers' electricity bills.
During a visit to Japan in late November sources in the Japanese government told me that senior officials are discussing the possibility of introducing a registration system for foreigners buying property in Japan.
Research by JLL shows purchases by foreign buyers (excluding Singapore permanent residents), rose 12% in the first nine months of 2016 from the same period last year. Nationals from China, Indonesia, Malaysia and the United States were the leading buyers.
According the media reports, the average Airbnb host in Singapore makes just S$5,120 (US$3,600) per year.
Thailand’s Crown Prince Vajiralongkorn ascended to the throne as King Maha Vajiralongkorn Bodindradebayavarangkun. To-date there has been none of the unrest that many analysts anticipated after the death of his father, King Bhumibol Adulyadej, who was seen as a stabilizing influence on Thai politics.
Trends and Ideas
Airbnb will begin enforcing limits on private home rentals in London and Amsterdam. The company will use an automated system to cap entire home listings at 90 days per year in London and 60 days in Amsterdam.
The mayors of Mexico City, Paris, Madrid and Athens will ban diesel-powered vehicles from their cities by 2025. Diesel engines are a source of nitrous oxide and particulate matter, which contribute to air pollution.
Microsoft is rumored to be challenging Amazon's Echo and Google's Home with Home Hub, a software package for Windows 10 that links shared computers and controls smart home devices.
A study of 3,083 low-income housing developments in the United States found that—in most cases—these projects did not reduce the value of nearby homes.
The video of my September 13, 2016, presentation to the Japan-America Real Estate Coalition Office (JARECO) in Tokyo is now on line. A transcript of the presentation—which contrasts the process of buying property in Japan with other countries—is here. You can find several other real estate–related presentations here.
I’d like to take this opportunity to wish readers a Merry Christmas and a happy, healthy and prosperous 2017.
Landed Newsletter No. 14 was published on December 7, 2016.