Snipping the interesting parts:

    <type arch='aarch64' machine='virt'>hvm</type>
[...]
  <features>
    <gic version='3'/>
[...]
  <cpu mode='host-model'>
    <model fallback='allow'/>
[...]

That means on Xenial-Newton that worked for you.
Yet as outlined before "worked" is a bit special here as it meant more "passed 
but didn't work" as outlined in comment #5 - I don't know the details of this.

With that in mind for now lets simplify the Test and try to get
Openstack out of the equation for now (although it might eventually be
the best place for a solution).

Will update after some tests ...

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https://bugs.launchpad.net/bugs/1673467

Title:
  [ocata] unsupported configuration: CPU mode 'host-model' for aarch64
  kvm domain on aarch64 host is not supported by hypervisor

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