Landed Newsletter No. 16 looks at global Airbnb returns and home affordability; the homes of rich survivalists; seasteading in French Polynesia; China's information crackdown; 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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British Columbia's home sales hit a record in 2016, despite a slowdown in the last half of the year. A total of 112,209 units were sold—up 10% from 2015—with sales volume rising 19% to C$77.6 billion (US$58.3 billion). The average home price in Vancouver rose 26%, to C$1.5 million. Only 1,523 homes sold in the Vancouver area in January 2017, a drop of nearly 40% from January 2016. Sales of detached homes fell nearly 58%.
Property tax assessments in B.C. are rising rapidly to reflect recent price increases. One newspaper report noted that the assessment of two single-family homes in Vancouver was greater than that of a pristine 780-acre (316-hectare) island off Victoria.
The B.C. government plans to exempt foreign nationals holding work permits from the 15% foreign buyers tax on Vancouver homes that was introduced in August 2016.
The square footage of new homes sold in China’s Tier 1 cities—Beijing, Guangzhou, Shanghai and Shenzhen—fell 48% in January, compared with the same month in 2016. Analysts attribute the slowdown to the central government’s market-cooling measures and an early start to the 2017 lunar new year holidays.
Shenzhen announced plans to redevelop more than 100 industrial districts and 100 urban villages by 2020. The land involved covers 30 square kilometers and will provide space for 260,000 apartments.
Rex Tillerson, the new U.S. secretary of state, told a confirmation hearing, "We’re going to have to send China a clear signal that, first, the island-building stops and, second, your access to those islands also is not going to be allowed.” Tillerson's comments, which were later echoed by White House spokesman Sean Spicer, were greeted with an outraged editorial in the Global Times. Earlier in January, China flew an H-6 bomber around the Spratly Islands in a show of force.
It's getting harder to get information in China:
- Two high-profile companies—The China Index Academy and E-house China—have stopped publishing their property price indicies. The companies declined to explain the move, resulting in speculation that they were responding to government instructions.
- China's foreign exchange regulator has instructed banks not to publicize its instructions about curbing capital outflows.
- The government instructed local meteorological bureaus to stop issuing smog reports.
- The Ministry of Industry and Information Technology announced a crackdown on the virtual private networks that netizens use to access websites outside China.
Describing the situation as "grim," officials in Foshan, Guangdong Province, stepped up hygiene measures to stop the spread of H5N9 avian influenza.
Juwai.com formed a joint venture with Tencent—China's largest internet company—to sell international property to Mainland buyers.
A company buying a house on the Peak will pay a record high HK$324 million in stamp duty. Giant Victory Holdings paid HK$1.08 billion for the house, Asia’s most expensive on per a square foot basis, on Mount Nicholson Road.
Sales of pre-owned homes fell to a 21-year low in 2016 as the government's market-cooling measures took effect. The value of secondary market sales fell to a three-year low of HK$241.5 billion (US$31.1 billion). In December 2016, 6,967 sale and purchase agreements were signed, down 19.2% on November, but up 31.6% year-on-year.
Hong Kong's two largest agencies, Midland and Centaline, are offering mortgages of up to 130% of a home's value to buyers who already own homes. The new mortgages are not regulated by the city's de facto central bank, the Hong Kong Monetary Authority.
Chief Executive CY Leung announced a series of development plans in his 2017 policy address that would see 460,000 new apartments, including 200,000 public rental units and 80,000 subsidized sale units, built in the decade starting in 2017-18.
Benzene 79 times the acceptable level was found in the groundwater at Toyosu, the new home of the Tsukiji fish market. Benzene is a known carcinogen, and there are concerns that data from earlier tests may have been falsified.
The Japanese government announced a series of measures to make it easier for foreigners to become permanent residents and start companies in Japan.
In a move to increase tourist numbers and improve the economy of rural areas, the Japanese government plans to create 500 areas for homestays in farming and fishing communities throughout the country.
Sekisui House announced plans to build Japan's first "Net Zero Energy" condominium complex in Nagoya. Scheduled for completion in 2019, the building will have a 50 kilowatt solar power generating system.
In a development that will be welcomed by foreign travelers to Japan, the country's high-tech toilet manufacturers are standardizing the icons on the control panels of their products.
Residents and Buddhist monks staged violent protests against a port in southern Sri Lanka in which China invested US$1.2 billion. China signed a 99-year lease on the port in Hambantota, which will include an industrial zone.
Trends and Ideas
The Harvard Joint Center for Housing Studies released "Projections and Implications for Housing a Growing Population: Older Households 2015-2035," a report that looks at how aging babyboomers will shape the residential market. The report focuses on the United States, but offers insights that apply to other markets.
The Priceonomics blog looks at why professional landlords have avoided Airbnb so far.
Nested.com compiled a chart showing how many months of Airbnb rentals it would take to recoup the value of a three-bedroom home in 75 cities around the world. The five cities with the longest payback time were Seoul (229 months), Tokyo (264), Taipei (271), Hong Kong (456) and Beijing (714).
Friends and neighbors
Facebook’s Mark Zuckerberg threatened legal action against residents with a hereditary claim on parts of a 700-acre parcel of land that he purchased in Hawaii. In addition to being a public relations fiasco, it was a mistake that could have been avoided with basic research.
A couple in New Brunswick, Canada, was found guilty of harassing their neighbors, after they built a pile of cow manure next to the property line that was so large that it could be seen on satellite images.
New research that tracked more than 6 million people for decade shows that living next to a busy road increases the likelihood of dementia.
Treepedia is the name of MIT's tree-cover map of 15 cities, including Singapore, Toronto and Vancouver.
In the annual Demographia survey (PDF), Hong Kong was named the city with the world's least affordable housing for the seventh consecutive year. Hong Kong was followed by Sydney, Vancouver and Auckland.
An anonymous group in Brazil are modifying street-side garbage bins so donors can hang bags of still-edible, leftover food off the containers. The program minimizes waste and saves poor people from having to rummage through inedible trash.
The United States Federal Trade Commission is offering a US$25,000 prize to developers who create a device that protects consumers from software vulnerabilities in internet-of-things (IoT) devices.
The New Yorker has an interesting piece about wealthy Americans' disaster preparation plans, including homes built into former missile silos in Kansas and ranches in New Zealand.
I'll be moderating a session about the effects of an economic slowdown in China on global real estate at the PERE Asia Summit in Hong Kong on March 2.
Landed Newsletter No. 16 was published on February 6, 2017.