Yes, support for python 3.4 is being dropped entirely in the next release, which I guess is in the dev branch by now. The new minimum will be 3.5.3 - unfortunately Ubuntu 16.04 LTS is 3.5.2.
I upgraded my 16.04 to 17.10 yesterday which came along with version 3.6.3 of python. The upgrade was pretty smooth and all I needed to do was recreate my hass venv
I also needed to reinstall AppDaemon, and I found a couple of fixes were required that will be in the next beta.
It is possible to install python 3.6 in paralell with the existing 3.5.2 but that looked clunky and I wanted the default python3 to be the new version.