In Landed Newsletter No. 39: cracks in Australia’s housing market, China wins the skyscraper race, free homes and tax breaks in Japan, Caracas collapses, retiring in Margaritaville 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.
Residents of Sydney Opal Tower, a new 38-story apartment complex, were forced to evacuate their homes on Christmas eve after cracks were found in the building. Structural engineers are investigating the cause of the cracks.
As a result of a cooling property market, the City of Toronto is projecting a C$99 million (US$74 million) shortfall in revenues from land transfer taxes this year. Toronto had projected revenues of C$818 million from the tax.
In November, the number of homes sold in Vancouver fell 42% year-on-year.
For the first time, the Canadian government used the proceeds-of-crime law to freeze the assets of individuals charged with real estate–related tax evasion. The proceeds-of-crime law can also be used to seize property outside Canada.
The Greater Fool, a blog by former Canadian finance minister Garth Turner, has a summary of the coverage generated by a news release from Royal LePage, one of Canada's largest real estate agencies. The release—which predicts nationwide price increases in 2019—was carried by nearly every major (and minor) media outlet in Canada. Caveat lector may be Latin, but it's still good advice.
In 2018, China set a new record for erecting skyscrapers in a single year. Over the past 12 months, 88 buildings that were 200+ meters in height were completed in China.
As China's real estate market cools, Guangzhou became the first major city to relax restrictions on apartment sales.
Interest in so-called nano flats (apartments smaller than 18 square meters) has fallen dramatically, with one-in-three units built in 2018 remaining unsold. Unlike Japan, where tiny apartments are common in city centers, most of Hong Kong's nano flats were built far from the urban core and make little sense for people hoping to trade a smaller home for a shorter commute.
As Hong Kong residential property prices continue to drop, the government said it would not bail-out buyers experiencing negative equity.
Hong Kong's embattled justice minister, Teresa Cheng, avoided prosecution for having illegal structures in her home. Her husband and next-door neighbor, Otto Poon, will face charges.
Recently, there's been plenty of media coverage about Japanese houses being given away for free. While "free homes" makes a good headline, the houses come with strings—such as large tax and maintenance bills—attached. And the homes are usually in cities and towns where the population (and thus the number of corporate and individual taxpayers) is shrinking. That means rising tax bills for those who stay and fewer services, including schools, hospitals and snow and trash removal. For more information, and details about how to find a genuine bargain property in Japan, see Landed Japan.
Ahead of an increase in Japan's consumption tax from 8% to 10%, the government extended the tax deduction for home mortgages from 10 years to 13 years. In Japan, consumption tax applies to buildings but not land.
In 2018, Japan experienced a record 3,451 mudslides that killed 161 people and destroyed 1,443 homes. Earthquakes and heavy rains were the main causes of the landslides.
In the first exception to a new law, the government announced that foreigners would be allowed to buy units in the 57-story Pacifica complex in Auckland. Under the new law, residential land cannot be transferred without a "residential land statement" stating the buyer's nationality.
In late November and early December, I made two brief trips to Singapore. With all the doom and gloom in Asia's property markets, I was pleasantly surprised by the amount of construction in the Lion City. While the pace of activity may have slowed, there's still a lot of building going on.
Trends and Ideas
USA Today looks at crumbling buildings in Havana. The story has useful information for anyone thinking of renovating an old home in places like Vietnam and Cambodia.
Starting in 2020, solar panels will be mandatory in new homes built in California.
In South Australia, Tesla's giant battery saved local electrical utilities A$40 million (US$29 million) in its first year of operation. The battery cost US$66 million.
Researchers at Kings College London are using artificial intelligence to predict the London neighborhoods that will be affected by gentrification.
The Guardian, a British newspaper that is sympathetic to socialist causes, takes a hard look at the collapse of Caracas. The article is instructive for anyone thinking of investing in an emerging market.
Here's to a happy, healthy and prosperous 2019 to all of my readers.
Landed Newsletter No. 39 was published on December 31, 2018.