Newsletter No. 4 looks at currency controls and mortgage restrictions in China; affordable cities around the world; Airbnb's progress in Japan; a search engine that lets you snoop on security cameras; and much more.
The Australian government has ordered the sale of eight properties (http://asia.nikkei.com — Paywalled) that were purchased in contravention to the country’s foreign ownership laws, bringing the total number of forced sales to 27. With a total value of A$8 million, the properties were purchased by residents of Canada, the United States, China, India and Malaysia.
The government of British Columbia will hire an external consultant to prepare a report on the influence of foreign investors on the province's real estate prices. The government did not say if the results of the study would be made public.
The condominium fees collected by owners' corporations (known locally as strata corporations) in B.C. are far too low to finance the work that their buildings will soon need. A consultant estimates that less than 2% of the corporations have adequate reserves. Buyers should adjust their due diligence checklists and budgets accordingly.
A group of B.C. academics proposed a tax targeting absentee homeowners who do not pay other taxes in Canada. The 1.5% tax would be offset, dollar-for-dollar, by federal or provincial taxes paid, with the collected revenues redistributed to taxpayers in the affected region.
The debt load of Canadian families has grown to the highest level since 1990. The Parliamentary Budget Office reported that in the third quarter of 2015, total household debt reached 171% of disposable income. That leaves Canadians vulnerable to higher interest rates and an economic slowdown.
On January 20, the Bank of Canada announced that it would keep interest rates unchanged. The price of oil and the value of the Canadian dollar rallied at the end of January after falling to multi-year lows. The price of imported food spiked, resulting in numerous stories about C$8 caulifower.
China’s foreign exchange laws allow individuals to—legally—bring US$50,000 in and out of the country each year, without special permission. But with China’s recent financial turmoil, there have been reports that arranging U.S. dollar bank transfers out of China has become unusually difficult. China Law Blog has more.
HSBC has stopped providing mortgages to certain Chinese nationals buying homes in the United States. In a Reuters article, the bank declined to disclose which customers were affected, but noted that similar policies were already in effect in Canada.
Shanghai's government will cap the city’s population at 25 million. That should be good news for existing homeowners.
Chinese scientists have made a breakthrough in desalination technology that will facilitate the country’s territorial expansion in the South China Sea, where small islands face chronic shortages of drinking water. The new system is reported to be cheap and energy-efficient.
More than 1,000 residents of Nanning, Guangxi, discovered that the access road to their homes had been sold to a developer and excavated, leaving them with no way to reach their residences. The construction company claimed the work had been done with the approval of the local government.
In January 2016, new home sales in Hong Kong fell 80% from December 2015. January's sales numbers were the worst in 25 years.
Three years after it was formed, the Sales of First-hand Residential Properties Authority initiated its first case against a developer that allegedly failed to provide sales information to home buyers. The developer is a subsidiary of Tung Chun Soy Sauce, which may not be the first name that comes to mind when you think of the Hong Kong property business.
Ota-ku has begun accepting applications from homeowners who want to rent their dwellings through services like Airbnb. However the rental system—which requires landlords to notify nearby neighbors and the fire department in advance, among other restrictions—is cumbersome. Ota-ku is one of Tokyo's 23 wards.
In a surprise move, the Bank of Japan announced that it would introduce negative interest rates in mid-February. Under a negative interest rate policy, commercial banks pay the BoJ to keep their money on deposit. Denmark, Sweden and Switzerland also have a negative interest rate policy.
Trends and Ideas
Hong Kong's homes were named the world's least affordable in the annual Demographia survey of 367 metropolitan areas in nine countries. Hong Kong was followed by Sydney and Vancouver. The Osaka-Kobe-Kyoto and Tokyo-Yokohama areas were the first and second most affordable megacities, respectively, in the survey.
Twenty-one of the world's most violent cities are in Brazil. In the United States, Baltimore, Detroit, St. Louis, Missouri, and New Orleans make the top 50. No cities in Asia appear on the list.
Clive Thompson at Mother Jones looks at the land that will be freed up when driverless cars become ubiquitous. Considerable space is at stake. The one billion parking spaces in the United States occupy an area larger than Connecticut.
Internet of things
Ars Technica reports on a search engine called Shodan that lets you snoop on cameras monitoring everything from sleeping children to marijuana farms. Another good reason to read the manual and change the password before you connect that baby monitor to the Internet.
Transcripts are now available for nine videos on the Landed website. The transcripts cover a range of topics, including:
- Buying a home in China
- Investing in real estate in the United States
- Buying international real estate
The Landed books now have a dedicated YouTube channel.
Landed Newsletter No. 4 was published on February 1, 2016.