Newsletter No. 3 looks at the economic turmoil in Canada, controversial developments in Hong Kong, restarting a nuclear power plant in Japan, new anti-money laundering measures in the United States, problems with home automation systems and more.
In early 2016, oil dropped below US$30 per barrel, the Canadian dollar slid below 70 U.S. cents and inflation began rising, fueled by more expensive imports. There is growing speculation that the Bank of Canada will announce a rate cut next week, putting further pressure on the loonie.
Meanwhile, British Columbia homeowners who enjoyed rapidly rising prices will soon be paying higher property taxes. On January 4, 37,000 homeowners learned that the assessed value of their homes had increased 15%–30%, or more. Unsurprisingly, most of the increases were for houses in Vancouver and surrounding communities.
Elsewhere in Canada, Ontario and Quebec are the first and second most indebted sub-national governments in the world according to former Canadian Finance Minister Joe Oliver. Ontario’s debt is more than twice as large as that of California, a state with a population three times larger than the Canadian province.
Business is booming for debt collectors in Alberta, which continues to suffer from the effects of lower oil prices.
On December 20, a landslide in a Shenzhen industrial park left 12 people dead and 62 missing, destroyed 33 buildings and covered more than 100,000 square meters in mud. The Shenzhen landslide echoed a 2009 incident in Shanghai, when a 13-story block in the Lotus Riverside complex fell over.
The Chinese government introduced new laws governing the production and distribution of maps. The regulations target areas that are embroiled in territorial disputes, including Taiwan and the South China Sea.
Separately, the central government redefined Macau’s marine borders, adding 85 square kilometers to the territory’s area.
Shanghai-based photographer Raphael Olivier has captured stunning images of the most famous ghost town in China: Ordos, Inner Mongolia.
A New Year’s eve fire at the Address Downtown in Dubai highlighted concerns about fire safety in the city’s highrises, many of which are covered in flammable panels. It was Dubai's third high-rise fire in three years. Because existing structures are usually “grandfathered in” when codes are tightened, buildings can be classified as “legal, non-conforming.” It’s one more reason to research your new home before you buy.
The United States Federal Reserve raised interest rates by 0.25% on December 16. Because of the Hong Kong dollar’s peg to the U.S. dollar, interest rates in Hong Kong were expected to rise. After the Fed’s announcement, the Hong Kong Monetary Authority, the city’s de facto central bank, raised its base rate by 25 basis points, to 0.75%. However, three of Hong Kong’s largest lenders—HSBC, Hang Seng Bank and Bank of China Hong Kong— kept their best lending rate at 5.25%.
Following the conviction of 11 indigenous villagers for illegally selling their property rights, the Heung Yee Kuk—Hong Kong’s powerful rural affairs body—threatened to sue the Hong Kong government or seek a reinterpretation of the Basic Law, which is Hong Kong’s mini-constitution.
On January 13, Hong Kong’s Chief Executive C.Y. Leung delivered his 2016 policy address, which contained several property-related measures, including a plan to build 100,000 new apartments over the next five years. Three-quarters of the new units will be pubic housing. The full text of the policy address is available here.
In early January, the Hong Kong government quietly released a development plan for Lantau Island that included more than 60 hectares of reclaimed land and 14 tourism and recreation areas. Critics claim the plan, which is only available in Chinese, would damage the island’s environment.
President Joko Widodo has hinted that his government may make it easier for foreigners to buy property in Indonesia. But anyone thinking of investing in Jakarta real estate would be wise to investigate the city's subsidence problem. Some parts of Jakarta are dropping by as much as 25 centimeters per year, and a massive seawall has been proposed.
On December 24, a district court overturned an injunction against restarting two reactors in the Takahama nuclear power plant. Refueling began the following day and one of the reactors could be online by the end of January. Only two of the 43 active nuclear power plants in Japan are now operating.
Three companies involved in the Yokohama tilting condo scandal—Hitachi High-Technologies, Asahi Kasei Construction Materials and Sumitomo Mitsui Construction—have received punishments ranging from 15-day suspensions to loss of government orders.
In 2003, Kamikatsu announced a plan to become Japan’s first “zero waste” community. Today the town of 1,700 people recycles 80% of its trash, with residents sorting their garbage into an astonishing 34 categories, as this brief video explains.
The U.S. government has announced a crackdown on foreigners in all-cash real estate deals, with an initial focus on New York and Miami. In conjunction with the weakening Canadian dollar, the American move could make Vancouver real estate even more attractive to international buyers.
California Governor Jerry Brown declared a state of emergency at a natural gas storage facility near Los Angeles that is leaking more than 1,000 tons of methane per day into the atmosphere. The leak, which is located deep underground, has been continuing for three months. As a greenhouse gas, methane is 25 times more potent than carbon dioxide, and people living nearby have been reporting health problems.
Trends and ideas
The Japanese government has announced plans to relax regulations on Airbnb-style rentals in preparation for the arrival of Olympic tourists.
Meanwhile, large U.S. landlords are in talks with Airbnb to collect income from tenants who rent out their homes.
I like the idea of managing my home’s heating and cooling, security and lighting by remote control. But smart home systems’ cost, reliability—including a recent software glitch in the Nest thermostats—and ease of operation continue to disappoint. Now there’s another issue to add to the list: digital rights management. Electronics manufacturer Philips hastily reversed a decision that would block the use of competing brands of light bulbs in its Hue lighting system.
And as smart home technology evolves, interesting questions emerge. For instance, who owns the data generated by your smart home appliances when they are connected to the internet of things (IoT)? And what happens when your smart appliances talk to each other, but leave you out of the conversation?
It’s not just fireplaces
Further to the story in Newsletter No. 1 about San Francisco banning fireplaces in new homes, a town outside Naples, Italy, has temporarily banned the use of wood-burning pizza ovens in a bid to reduce air pollution. I am betting that barbecues will soon be targeted for the same reason.
A new video — Hong Kong Property Without Tears — is now available on the presentations tab of the Landed Book website. The 22-minute video, which was shot at a joint Canadian and American chamber of commerce event in November 2015, explains how to buy Hong Kong apartments and village houses in the New Territories.
Newsletter back issues
Finally, back issues of The Landed Newsletter are now available on line.
Landed Newsletter No. 3. was published on January 15, 2016.