The Landed Newsletter No. 22, August 2017

Welcome!

In Landed Newsletter No. 22: Canada raises interest rates and introduces new stress tests for borrowers. Airbnb expands and atones. And is your vacuum cleaner spying on you?

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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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Market News

Canada

The Bank of Canada raised its benchmark interest rate for the first time in seven years, increasing the rate from 0.5% to 0.75%. Canada's five largest banks followed suit, boosting their prime rates from 2.7% to 2.95%.

The Common Reporting Standard came into effect on July 1, requiring Canadian banks to provide detailed information on nonresidents' financial accounts to the Canada Revenue Agency. The new rules will make it more difficult for nonresidents to evade taxes on income from real estate transactions.

The Office of the Superintendent of Financial Institutions released guidelines requiring new borrowers with a 20% or greater down payment to demonstrate they can afford a 2-percentage-point increase in mortgage rates. Previously, the stress test only applied to borrowers with less than a 20% down payment.

Vancouver is introducing new rules that limit short-term home rentals to principal residences and exclude secondary suites, laneway homes and investment properties. Hosts will need a business license and pay up to 3% tax on revenue from stays. The city will also hire three employees to enforce the regulations.

An air quality advisory was issued in Vancouver as wildfires throughout British Columbia elevated air pollution levels in the city.

The Vancouver Sun has an interesting look at the economics of adding a solar power system to a home in British Columbia.

In July, I spent part of my summer vacation in Ottawa and Montreal. Montreal, pictured below, continues to have a surplus of commercial space, including vacant stores in the Quartier des spectacles, which was swarming with tourists during the annual jazz festival. Many stores appeared to have been empty for some time. Ottawa has a similar problem, with retail space available in prime locations, like Bank Street and the Glebe.

Downtown Montreal, as seen from Bonsecours Basin Park
Downtown Montreal, as seen from Bonsecours Basin Park.

China

Overseas purchases by large Chinese developers—including Wanda and Sunac—came under regulatory scrutiny, as did the ownership structure of airlines-to-property conglomerate HNA Group.

Despite the added scrutiny, China's CM Group announced that it had purchased the iconic Grouse Mountain Resort in North Vancouver.

A family of seven in Shaanxi Province was dragged out of their home, bound and gagged, and forced to watch as their house was demolished. The family had refused a compensation offer from the local government, which wanted to develop the land under the home.

Hong Kong

Two professors from Hong Kong University proposed emptying and building homes on the Plover Cove Reservoir, which is located inside a country park. The proposal was not well received.

The Urban Renewal Authority announced a redevelopment project in Sai Ying Pun. The 1,100-square-meter site covers 10 buildings in the up-and-coming neighborhood on Hong Kong Island.

Japan

For the 32nd consecutive year, Ginza had the most expensive land in Japan, according to figures from the National Tax Agency. Prices in Tokyo and Okinawa increased 3.2%, year-on-year, while a shopping street in the Niseko ski resort jumped 77%.

Online retailer Rakuten has entered an affiliate agreement with U.S.–based HomeAway to provide short-term home rentals in Japan.

At least 34 people were killed in Fukuoka and Oita prefectures after several days of torrential rains washed away homes, schools and roads.

Nippon.com has an interesting look at the redevelopment of the area surrounding Tokyo's Shibuya Station.

Trends and Ideas

Airbnb

From December, short-term rental hosts in Paris will be required to obtain registration number from the city government before placing an ad.

Airbnb is planning a high-end service renting mansions and penthouses to wealthy guests.

In New York City, hotel operators and unions representing hotel workers are funding sting operations to expose illegal short-term rentals.

After reports that hosts were discriminating against black guests, Airbnb formed an alliance with the NAACP to encourage black homeowners to become Airbnb hosts.

Elevators

Thyssenkrupp has developed a new elevator system that uses magnetic technology to travel horizontally and diagonally.

Privacy

A smart home device contacted police after it overheard a domestic dispute in Albuquerque, New Mexico. Authorities credited the device with averting a potentially life threatening scenario.

The manufacturer of robot vacuum cleaner Roomba denied that it plans sell the mapping data it gathers about the inside of owners' homes. An earlier interview suggested otherwise.

Meanwhile, in what Amazon describes as an opt-in system, the company's delivery drones will scan the outside of your home and suggest repairs.

Landed News

I was interviewed in the South China Morning Post about Hong Kong people buying real estate in Japan.

Landed Newsletter No. 22 was published on August 1, 2017.