The Landed Newsletter No. 28 February 2018

Welcome!

Landed Newsletter No. 28 looks at the perils of Alexa, higher interest rates in Canada, illegal structures in Hong Kong, islands for sale in Indonesia, abandoned land in Japan, a new Airbnb law in San Francisco and much more.

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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 lending rate from 1.0% to 1.25%. Commercial banks followed suit, with the Royal Bank of Canada increasing its prime rate to 3.45%.

The British Columbia Supreme Court decision on the Fu vs. Xia case, which involves multimillion-dollar real estate investments by Mainland immigrants, makes for fascinating reading. The Canadian authorities appear to be waking up to the realities of international passport shoppers.

Owners of empty homes in Vancouver have until Friday, February 2, to register with the city. Owners filing false declarations face fines of up to C$10,000 (US$8,100) per day.

Amazon released a short list of 20 cities still in the running to host its second headquarters. Toronto is the only non-U.S. city left from the 238 original bidders.

China

Shanghai law firm IPO Pang Xingpu has an interesting look at landlord–tenant laws in China

Hong Kong

Hong Kong's newly appointed Secretary for Justice, Teresa Cheng—who is both an engineer and a barrister—became embroiled in a scandal when reports surfaced that several properties she owns include illegal structures. Ms Cheng is under growing pressure to resign. Meanwhile, the South China Morning Post estimates that 25% of Hong Kong buildings contain illegal structures.

Research by a non-governmental organization suggests that nearly one-quarter of over 42,000 small houses built for ­indigenous villagers in the New Territories were illegally sold to developers through secret contracts.

Hong Kong's property market continues to soar. A 121-square-foot (11.2-square-meter) studio apartment in a 29-year-old public housing estate sold for HK$1.93 million (US$247,435).

The Estate Agents Authority introduced practice guidelines for licensed agents selling overseas property in Hong Kong. Currently anyone can sell overseas property in the SAR.

Engineers have proposed building a massive housing estate on top of the Kwai Tsing container terminal. The terminal continues to lose market share to less expensive Mainland ports.

Indonesia

Two islands—Ajab and Tojo Una Una—are for sale with prices starting at US$3.3 million. Ajab is 74 acres and is available freehold. Tojo Una Una is 3,000+ acres and is leasehold.

Japan

The Japan Times looks at three businesses' efforts to profit from Japan's abandoned homes. Separately, Nippon.com examines the growing volume of abandoned property in Japan and the government's plans to solve the problem.

The city of Toyama is using some innovative ideas to reorganize its homes and transportation network to be more senior-friendly.

The Japanese government is considering a plan that would see foreigners evacuated by boat to Tokyo's Haneda Airport if a major earthquake strikes.

Malaysia

The South China Morning Post looks at how the lack of an anti-discrimination law is shaping Malaysia's residential rental market.

Trends and Ideas

Affordability

Demographia released its 14th annual survey of international housing prices. Hong Kong was the least affordable city, followed by Sydney, Australia, and Vancouver.

Airbnb

San Francisco introduced a law requiring hosts to register with the city in order to list their homes on Airbnb and similar sites. The new law has seen thousands of hosts stop renting their homes.

Climate Change

A new research paper concludes that U.S. homes at risk of rising sea levels sell at a 7% discount compared with properties that are not at risk. Interestingly, rents for at-risk homes are not discounted.

Scientists now claim they can attribute individual natural disasters to climate change, in a development that will pave the way for citizens to sue companies for damages.

Environment

Automakers including Toyota, Honda and Kia that used a soy-based compound as insulation on electrical cables are being sued in the United States after rodents began eating the insulation, immobilizing the cars. Soy-based thermal insulation is being sold to  homeowners, but I haven't seen any references to it attracting rats.

Health

A Canadian study of 8,000 people who suffered a heart attack in a private residence found that the higher the floor, the lower the survival rate. There was a 0% survival rate among victims on the 25th floor and above, due to problems accessing the building and elevators.

Investing

New research shows that—over the long term—residential real estate performs as well as or better than equities or bonds. Looking at the period from 1870 to 2015, property investors in Japan and France did particularly well.

Resilience

A new study by the U.S. National Institute of Building Sciences concludes that every $1 spent on hazard mitigation produces a $6 saving in future costs. The study also found that each dollar spent on stricter building codes produced a $4 benefit.

Smart homes

Over the holidays, I visited a friend whose children bought an Alexa as a family Christmas gift. My friend likes it. But I found the prospect of a "digital vacuum cleaner" in my home gathering data about everything from my breakfast choices to my sleep patterns for storage and analysis by artificial intelligence systems that grow-ever more powerful to be unsettling.

Alexa and similar systems pose interesting etiquette questions. For example, can I accept your dinner invitation on the condition that you turn Alexa off? Will it be acceptable to wear an "Alexa blocker" (something that needs to be invented, post haste) to dinner? Do I have a right to know when I am under audio surveillance by Google, Apple or Amazon? Stories like this don't fill me with confidence.

Landed News

The second edition of Landed Japan  will go to the printer in February. But before it does, I need your help. Send me an email (chris@dilloncommunications.com) explaining which cover you prefer. On February 4, I'll draw a random reply from social media and newsletter subscribers. That person will win a free copy of Landed Japan or one of my other books.

Landed Japan covers

I'll announce launch events for the Landed Japan shortly.

On March 8. I'll chair the second day of the PERE Asia Summit in Hong Kong.

 

Landed Newsletter No. 28 was published on January 30, 2018.