Market News

Australia

Australia’s richest woman, Gina Rinehart, and Chinese developer Shanghai CRED will jointly purchase S. Kidman & Co, the country’s largest private land holding, for A$365 million (US$276.8 million). Rinehart’s Hancock Prospecting will own 67%, with Shanghai CRED holding the balance. Rinehart later said that she would buy the ranch with or without the participation of her Chinese partners, if the Chinese investors are blocked by the Australian government.

Canada

In its latest market assessment, Canada Mortgage and Housing Corporation, the federal housing agency, raised the risk rating for the national housing market to “strong” from “moderate” in July. Toronto and Vancouver were cited for having continued problematic conditions.

Macleans magazine has a round-up of the recent changes to the regulations governing Canadian real estate.

The Canadian government recovered C$240 million (US$179 million) in taxes as a result of an ongoing investigation into vendors evading sales tax and failing to report capital gains.

Canada has the highest household debt among G7 countries, with household debt exceeding Canada's GDP for the first time in history.

In September, Vancouver home sales fell one-third—to 2,253, from 3,345 in September 2015—following the introduction of a 15% tax on non-resident buyers in August.

China

Shenzhen increased the minimum down payment for second homes to 70% and introduced new restrictions on the number of homes that families and individuals can own. Separately, authorities raided 42 property agents who were suspected of providing illegal down payment loans to buyers. Shenzhen property prices rose more than 34%, year-on-year, in September.

In a new round of marketing-cooling measures, the city of Beijing announced caps on the prices that developers can charge for new apartments.

A court in Guangdong province rejected an appeal by lawyers representing Lin Zuluan, the former head of Wukan village, who was sentenced to 37 months in prison and a RMB200,000 fine for taking bribes. Wukan was the site of violent protests over illegal land sales.

Some 60% of the wealthy Chinese interviewed by the Hurun Report want to invest in overseas property, with Los Angeles, San Francisco and Seattle as their top three destinations.

Hong Kong

Hong Kong property continues to rebound. Home prices rose 2.8% month-on-month in September. The Land Registry recorded 9,504 sale and purchase agreements in September, up 28% on August, and 74% year-on-year. And a car park space in Midlevels sold for HK$4.8 million (US$619,000), setting a new record.

The government released Hong Kong 2030+, a blueprint for the city’s planning and development goals after 2030, for public consultation. The plan calls for the creation of two new towns in the New Territories and an artificial island off Lantau to accommodate a population of 8.2 million in 2043.

The Heung Yee Kuk, the statutory body representing indigenous villagers in the New Territories, will hire a public relations agency to improve its image. The Kuk has been at the center of numerous land-related controversies including the Wang Chau development described in the last edition of this newsletter.

The Hong Kong government released 16 feasibility reports, compiled between 2012 and 2014, for the Wang Chau development. The reports showed the bulk of the land for the project was privately owned plots that had been converted from agricultural to industrial uses, raising questions about why the government wants to build the project on an environmentally sensitive greenbelt.

A Hong Kong investor lost an appeal to claim HK$270,000 in stamp duty, after he sold two apartments to buy a larger one. The Amended Stamp Duty Ordinance, which was introduced in 2014, imposes double stamp duty but allows exemptions for people buying a new home for their own use if they sell their existing home within six months.

Japan

Sales of new condominiums in the Tokyo area fell 32%—to 13,303 units—in the first eight months of the year, the lowest number since 1992. Currently, 35-year fixed rate mortgages are available for as little as 1.06%.

In the first nine months of 2016, foreign investors sold ¥595 billion (US$5.72 billion) more Japanese property than they bought, according to research by Mizuho Financial Group. Total purchases for period fell 80%, to ¥130.2 billion yen, the lowest since 2012.

U.S.–based MGM Resorts is ready to invest ¥500 billion to ¥1 trillion on an "integrated resort" combining casinos, hotels, shopping and conference space in Tokyo, Yokohama or Osaka when Japan's gambling laws are relaxed.

Philippines

Philippine President Rodrigo Duterte announced his "separation" from the United States, stating that he had realigned with China. The announcement, which caught U.S. authorities by surprise, has the potential to radically upset the power balance in the South China Sea.

As part of President Duterte’s crackdown on drug users and dealers, the Philippines is opening four large rehab facilities. The first facility—located on a former military base north of Manila with capacity of 10,000—will be funded by Chinese philanthropist and real estate developer Huang Rulun.

Singapore

Researchers from the National University of Singapore found that the opening of a new urban rail line increased the value of private homes within 600 metres of MRT stations by 6%. Homes near interchange stations gained an extra 4%, but the announcement of the location of new stations had an insignificant impact on property prices near the proposed stations.

Thailand

Thailand’s revered King Bhumibol Adulyadej died on October 13. The 88-year-old monarch was a stabilizing influence and observers fear his passing may mark the beginning of a period of political instability.

Trends and Ideas

Airbnb

A new law in New York State includes fines of up to US$7,500 for hosts listing a property on a rental platform such as Airbnb. In response, Airbnb announced a lawsuit in federal court challenging the law.

Meanwhile, the city of Vancouver has filed what is believed to be its first lawsuit to shut down an Airbnb host.

Airbnb now prohibits hosts from discriminating against guests on the basis of "race, color, ethnicity, national origin, religion, sexual orientation, gender identity, or marital status." Some activists complained that the changes did not go far enough.

Earthquakes

A team from Brigham Young University in the United States is using drones and three-dimensional computer modeling to learn how earthquakes affect ancient and modern infrastructure. The researchers used the technique at the site of a 6.2 magnitude earthquake this summer in Italy.

Home automation

Google introduced Google Home, a digital assistant that marries a wireless speaker with a set of microphones that receive your voice commands. Google Home costs US$129 and ships on November 4.

A massive distributed denial-of-service (DDoS) attack in mid October took large portions of the internet in the United States offline. The attack relied on insecure passwords on internet-of-things–enabled devices, particularly those using video cameras made by Hangzhou Xiongmai Technology Co. Many of these devices cannot be secured, according to security researcher Brian Krebs. Meanwhile, China’s Ministry of Justice threatened legal action against anyone making "false claims" about the security of Chinese-made devices.

BullGuard Security has created a free scanner to check whether your network is listed on the Shodan IoT directory or accessible from the internet. The Wirecutter has background on the DDoS attack and suggestions for securing the internet-of-things devices in your smart home.

Solar power

Elon Musk of Tesla fame has unveiled a line of roof tiles that generate electricity from the sun.

Urbanization

Richard Florida, the University of Toronto professor whose book The Creative Class shaped urban development, is writing a new book in which he admits that his original thesis—that the creative class could magically restore our cities and become a new middle class—was wrong.

Landed News

Media coverage

I was interviewed by the Global Times in Beijing about buying a home in China and in Square Foot about mortgages in Hong Kong.

Christmas gifts

The Landed books make excellent Christmas gifts, especially when they carry a personalized greeting from the author. Contact us for details.

Landed Newsletter No. 13 was published on November 2, 2016.