Landed Newsletter No. 17 looks at Hong Kong's astronomical property prices, cannabis culture and green bylaws in Vancouver 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.
Australia forced the sale of 61 residential properties with a total value of A$107 million (US$82.1 million) that were purchased illegally by foreigners. Another 36 properties were sold voluntarily while their purchase was under investigation.
A federal member of parliament proposed that tenants who are first-time buyers and who have good rental records should be eligible for home loans equal to 100% of a property's value. The proposal was criticized for making marginal buyers vulnerable to interest rate increases.
Figures from the 2016 census show that the proportion of homes in Vancouver not “occupied by usual residents” was 8.7%, up from 7.8% in 2011. The designation means the home is vacant, or occupied by temporary or foreign residents. The census also showed that Vancouver has the highest population density in Canada, at 5,493 people per square kilometer.
Vancouver has a new green rezoning bylaw that will take effect on May 1, 2017. The bylaw only applies to new rezoning projects and requires new buildings meet the Passive House or LEED Gold standard. More information here (PDF).
In what has been described as a landmark decision, the Supreme Court of British Columbia ordered a Mainland citizen to obey a Chinese judgment and repay a RMB50 million (US$7.3 million) loan from Citic Bank. Proceeds of the loan are believed to have been used by Yan Shibiao to buy real estate in Vancouver.
I was in Vancouver for a couple of days in February—not the warmest or sunniest month to visit that city—and was struck by how prevalent cannabis culture had become. While pot remains illegal, it is sold openly in "dispensaries," and shops like this one on West Hastings Street are common.
Speaking anonymously, two United States military officials claimed that structures China is building on islands in the South China Sea appear to be bases for long-range surface-to-air missiles. In February, both China and the United States conducted naval exercises in the South China Sea. Meanwhile, China objected when a joint U.S.–Japan communique affirmed that the U.S.–Japan security treaty covered the disputed islands that are known as the Senkaku in Japan and the Diaoyu in China.
At the end of 2016, the amount of unsold residential property fell 11% from year-earlier figures, to 403 million square meters. The government said it would offer subsidies to encourage people to buy the unsold inventory, much of which is secondary and tertiary cities.
Asset managers have been prohibited from investing in residential property developments in 16 cities—including Beijing, Shanghai, Guangzhou, Shenzhen, Xiamen, Nanjing, Hefei and Fuzhou—using private equity funds.
The city of Beijing has reduced the maximum mortgage length for people buying a second home from 30 years to 25. Second-home buyers may borrow a maximum of 30% of the property's value.
Superstition is alive and well—and taken seriously—in China. The management company and residents of a residential building in Wuhan, where a construction worker fell to his death, refused to let firefighters remove the victim's body using the elevator or stairs, fearing that it would bring bad luck. The body was lowered down the outside of the building using ropes.
Two Mainland developers paid a record HK$16.9 billion (US$2.2 billion) for an 11,761-square-metre plot of residential land on Ap Lei Chau, a small island attached to Hong Kong Island. The sale, which was Hong Kong’s largest lump-sum transaction, exceeding market estimates by nearly 50%.
Hong Kong home prices hit an all-time high in January, with the home price index rising 0.62%, to 309, from 307.1 in December. Prices rose 10.8% year-on-year in January.
Hong Kong Finance Secretary Paul Chan Mo-po delivered his maiden budget, which waived rates (property taxes) for the full 2017/18 fiscal year. The reductions are capped at HK$1,000 per quarter, per property.
The Hong Kong government announced its land sale program for 2017/18, which includes 28 residential sites on which nearly 19,000 apartments can be built. Eight of the sites are carried over from last year's program.
Developer Cheung Kong is offering to rebate all the stamp duty payable by buyers of its Crescendo villas in Yuen Long, which start at HK$22 million. Nonresident buyers currently pay 30% stamp duty.
Lending to Japan's real estate sector rose 15.2% in 2016, to ¥12.3 trillion (US$109.7 billion). That is the highest level since the government began keeping records in 1977.
A report by Bloomberg claims the Tokyo property boom is over, citing an inventory glut, rising prices and Chinese currency controls.
Philip Brasor and Masako Tsubuku at the "Cat Foreheads & Rabbit Hutches" blog have an interesting look at resort properties in Japan. Tens of thousands of “rizoman” (for “resort mansions”) were built during the boom years and can now be purchased inexpensively. But there are plenty of pitfalls to be avoided.
Trends and Ideas
The United States–based Population Reference Bureau released a report on how neighborhood characteristics, including walkability, air pollution, public safety and public transport, have on the phyiscal and mental health of older residents. The report concludes that improving neighborhood safety or changing the built environment may be more cost-effective ways to improve health outcomes among older adults than changing individuals’ health behaviors.
In a deal rumored to be valued at US$300, Airbnb acquired Montreal-based Luxury Retreats. The purchase gives Airbnb access to more than 4,000 premium properties around the world.
New York City began enforcing an anti-Airbnb law, issuing a total of 17 US$1,000 fines to two landlords in the city.
Landed Newsletter No. 17 was published on March 1, 2017.