The Landed Newsletter No. 33, July 2018

Welcome!

In Landed Newsletter No. 33, support for China’s rental housing market, Hong Kong introduces new market-cooling measures as a parking space sells for US$760,000, Airbnb and other home-sharing operators encounter turbulence in Japan, and unhappiness in Canada’s big cities.

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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

Australia

Home prices posted their first annual fall in six years, with prices in Sydney dropping more than 4% for the year.

Effective July 1, anyone purchasing a new residential property or a vacant residential lot must submit goods and services tax (GST) for the purchase directly to the Australian Tax Office. The new rules are designed to stop developers from selling properties for a price that includes GST and then dissolving their business before they are liable to remit the tax.

Canada

British Columbia’s Finance Minister, Carole James, announced the creation of a publicly accessible registry that will identify the owners of real estate in the province.

Home prices in Vancouver fell 35% from year-earlier figures, as the number of listings in the city continues to grow.

Rising prices in Vancouver contributed to a growing number of homes being demolished. Over the past 30 years, 26,700 Vancouver detached houses—or 40% of all houses—were demolished and replaced, according to a study by the University of British Columbia (UBC) School of Architecture.

Research by UBC’s Vancouver School of Economics and McGill University show that Vancouver and Toronto are Canada’s least happy cities. Saguenay and Trois-Rivières, Quebec, were the most cheerful.

China

In a bid to boost its tourism industry, Hainan will allow foreign tourists to access Facebook, Twitter and YouTube in designated zones in Haikou and Sanya. Western social media and news sites like the New York Times and Bloomberg are blocked in China.

Under pressure from Beijing, China's largest banks have pledged more than 3 trillion yuan ($467 billion) to finance the development of the nation's rental housing market. The initiative includes loans to renters at low interest rates with long repayment periods.

Hong Kong

The Hong Kong government announced plans to introduce a new tax on developers that hold completed apartments without selling them. The tax, which will be twice the estimated annual rental value of the property, is unlikely to have a meaningful effect on Hong Kong’s housing crisis.

A single parking space in a luxury development in Kowloon sold for a record HK$6 million (US$760,000).

Hong Kong's property market is often volatile, but rarely violent. That changed in June, when competing real estate agents brawled in up-market shopping mall and a woman allegedly shot four family members over a property dispute. Two victims later died of their wounds.

Indonesia

After rumbling for several months, Bali’s Mount Agung erupted, releasing volcanic ash into the air and closing the island’s airport.

Japan

Electronics giant Panasonic will enter the affordable lodging market by designing and building apartments in Tokyo and Osaka that rent for ¥5,000 (US$45) per person, per night. The buildings will be managed by home-sharing companies Hyakusenrenma and Squeeze.

The "Cat Foreheads & Rabbit Hutches" blog looks at how construction of the maglev train line between Tokyo and Nagoya (and ultimately Osaka) is shaping Japan's real estate market. While most the line is 60 meters underground, new stations, emergency access, tunnels and construction will cause disruptions on the surface.

New Zealand

New statistics show that one in five homes sold in central Auckland was purchased by an overseas buyer. Parliament is now considering legislation to block nonresidents from buying existing homes.

Vietnam

Anti-China protests erupted in Hanoi and Ho Chi Minh City over government plans to offer 99-year leases in special economic zones to foreign investors.

Trends and Ideas

Airbnb

In Japan, new laws governing home-sharing services, known as minpaku, took effect on June 15. The introduction of strict new national laws, which are complemented by restrictive local laws, saw the number of hosts drop from 62,000 to 2,700, prompting concerns that the new laws may threaten Japan's tourism boom.

Architecture

According to London-based architect Farshid Moussavi, creating “Instagram moments” is an increasingly common part of client’s architectural briefs.

Building technology

Katerra, a Silicon Valley start-up that has raised US$865 million in venture capital funding, acquired architectural firms in Atlanta and Vancouver. Katerra plans to use advanced technologies to disrupt the residential construction industry.

Landed News

Christopher Dillon speaking at the FCC in Hong Kong

On June 28, I delivered a luncheon speech at the Foreign Correspondents’ Club in Hong Kong entitled “Priced out of Paradise.” The presentation included strategies for surviving Hong Kong’s residential property market, but will be of interest to anyone trying to make sense of hyper-expensive home prices, whether they are in London, Singapore, Vancouver or Beijing. Photo courtesy of Susanna Leung.

I was interviewed for two articles in in the May–June 2018 edition of Asian Property Review: How I bought my first flat in Tokyo (PDF, 150 kb) and Of earthquakes, trains and airports (PDF, 600 kb).

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Landed Newsletter No. 33 was published on June 30, 2018.