In Landed Newsletter No. 34, cooling Singapore’s property market with new taxes and mortgage restrictions; a US$755 million, record-breaking deal in Hong Kong; rising prices, shrinking populations and mentally ill tenants in Japan; new restrictions on Airbnb in Canada and Hong Kong; 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.
From September, anyone buying real estate in British Columbia through a corporation or a trust will be required to disclose their name, citizenship and social insurance number.
A Chinese citizen and international student in Vancouver has challenged British Columbia's foreign buyer's tax in the province's supreme court, arguing that the tax illegally discriminates against people on the basis of their national origin.
New research by Simon Fraser University shows how untethered from economic reality the Vancouver housing market has become. Median Vancouver home prices are the third highest in North America, after Silicon Valley and San Francisco. But median incomes in Vancouver are 50th in a list of 51 metropolitan areas with a population of more than 500,000 people.
I spent a couple of days in Quebec City in July. In addition to having some of the cheapest residential rents in North America, Quebec City has 400 years of history that is reflected in the city's architecture.
There's also some interesting property for sale, including this church, which is currently housing a flea market.
An ad for the church said it could be used for anything except a bar or restaurant.
Shanghai tightened regulations to prevent people from forming a company to buy a home. Companies with less than five years of operations are barred from buying homes and they cannot buy a home unless their total tax payments are more than one million yuan (US$150,375).
A Mainland company bought a plot of land on Hong Kong Island for a record HK$5.93 billion (US$755.4 million). It was the largest single transaction by value in Hong Kong's residential market.
In response to the Hong Kong government's new vacant home tax, developers cut prices for villas in Yuen Long by up to 25%. The tax is intended to discourage developers from hoarding finished, new homes while they wait for prices to rise.
The Hong Kong government is under pressure to close a loophole that lets buyers avoid paying stamp duty by purchasing the company that owns a home, rather than the home itself.
In 2017, Japan's average land prices rose 0.7%. Increases were concentrated in Tokyo and in locations with tourist attractions.
After being slammed by torrential rains that killed 224 people, Japan experienced a record-breaking heatwave in July that caused at least 40 deaths. The rain is estimated to have caused some ¥570 billion (US$5.1 billion in damage).
In 2017, Japan's population dropped at the fastest rate since surveys began in 1968. The Greater Tokyo Area (which includes neighboring Chiba, Kanagawa and Saitama prefectures) was one of the few places to experience population growth. Hokkaido, on the other hand, was the biggest loser, with a net loss of nearly 35,000 people.
Bloomberg has an interesting look at the business of cleaning out Japanese homes, including those of people who have died alone.
Most Japanese tenants are hassle-free. But every now and then, there's an exception...
On July 6, the government increased the additional buyers stamp duty (ABSD). For Singapore nationals buying a second home, the tax rose from 7% to 12%. For third and subsequent homes, the ABSD increased from 10% to 15%. Permanent residents buying a second or subsequent home saw the ABSD jump from 10% to 15%. The rate for foreigners buying any residential property increased from from 15% to 20%.
At the same time, the government shaved 5 percentage points off the maximum loan-to-value (LTV) ratio for home loans. The maximum LTV is now 75% for a first home, 45% for a second and 35% for a third home.
Trends and Ideas
The Hong Kong government introduced a bill that would see fines for offering illegal accommodations rise from HK$200,000 (US$25,480) to HK$500,000 and prison terms extended from two to three years.
In British Columbia, Canada, strata corporations (the local equivalent of owners' corporations) will soon have the ability to fine owners and residents up to C$600 (US$450) per day for violating bylaws that forbid short-term rentals like those offered by Airbnb.
One month after new home-sharing legislation was introduced in Japan, host registration is off to a slow start. Only about a quarter of Airbnb's listings have complied with the new regulations. As of the first week of July, no registrations had been accepted in Tokyo's Chuo-ku.
USA Today has an interesting look at efforts to manage Detroit's 4,300 abandoned homes.
Internet of Things
A new report by internet security firm Armis claims 496 million IoT devices are vulnerable to a decade-old weakness called DND rebinding that allows an attacker to bypass a network firewall. The vulnerability affects more than 70% of routers and access points, streaming media players, speakers, and IP phones and cameras. Some 66% of printers and 57% of smart TVs are affected.
With cannabis set to be legalized in Canada later this year, there is much interest in related issues, such as how fire departments can inspect grow operations and whether farmland can be used to grow marijuana. A new research paper by the Western Economic Association International uses data from Colorado, where recreational marijuana has been legal since 2012, to estimate the effect of legalization on home prices. The researchers concluded "legalizing retail marijuana on average increases housing values by approximately 6%."
Politico has long-form piece on Google/Sidewalk Labs plans for a smart city on the Toronto waterfront, that includes a new word that I suspect we will be hearing more of: "smartwashing."
JLL, a real estate agency, released its 2018 Global Real Estate Transparency Index. The report is a useful reality check for anyone investing abroad, particularly in emerging markets.
On September 3, I will speak at the Swiss Chamber of Commerce in Hong Kong. The luncheon speech is at the Hong Kong Club and is open to the public.
I was also interviewed about buying overseas property in Britain in Hong Kong, the official magazine of the British Chamber of Commerce in Hong Kong (PDF, 400 kb)
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Landed Newsletter No. 34 was published on July 30, 2018.