Niseko Real Estate & Property

Interest from foreign investors and developers in Niseko property and Niseko real estate, particularly those parcels of land nearest Niseko’s major resorts (Hanazono, Hirafu, Higashiyama, Annupuri, Moiwa, and Rusutsu) continues to increase. With its consistent quality powder snow, the Niseko region is Asia’s premier winter sports destination.

The continued growth of visitors to Niseko is also fueling the demand for land. What started out as Australians looking for a affordable summer ski holiday in an exotic location with great snow and no jet lag has now spread to every expat and powder junkie in Asia. While Australians still make up the bulk of skiers and snowboarders (indeed, their numbers doubled this season as compared to last) they can no longer claim dominance, as alpine enthusiasts from Hong Kong, Singapore, Taiwan, and a sizable expat community in Tokyo, have all followed suit.

This increase in tourism has placed huge demands on local infrastructure, in particular accommodation. This has ignited a building frenzy, with nearly every corner of every block in Niseko-Hirafu under construction from spring all the way until the following season starts.

Combined with very attractive land prices, in particular compared to Australia, New Zealand, the US, or Canada, many foreign owned real estate and property management companies have rushed into Niseko to help manage the process of buying, selling, and owning Niseko property so that now foreigners can easily purchase and maintain their Niseko investment.

What started out as an “upper-middle-class” phenomenon for “those-in-the-know” has now attracted the corporate titans who usually only invest sizable sums based on thorough research and an expectation of a reasonable ROI.

Some recent acquisitions and development activity serves to back this up: Hilton Hotels, the international resort chain, will be managing the Higashiyama Prince Hotel for American Citigroup Principal Investments. Hanazono Ski Resort was acquired by Pacific Century Premium Developments, a Hong Kong company owned by billionaire Richard Li. Not to be outdone, Australian-based Citimark has thrown their hat into the ring by committing to the development of Niseko-Moiwa, a 15 to 20 minute drive from Niseko-Hirafu where they look to be planning a private western-style resort.

Now that we’ve provided a little background, here’s the kicker: The collapse of the property bubble in the 80’s caused Japan’s real estate market to drop by between 60-90%, and most areas of Japan, including believe it or not most of Niseko, have not recovered their former value. The shrinking population also contributes to depressed and undervalued property. For example, in Kutchan, the town that hosts Hanazono and Grand-Hirafu, a 4-bedroom home can still be had for USD 60,000. Also, at the risk of stereo-typing, the Japanese tend to be more risk averse, and many remember being burned by the bubble, which has kept more than few locals from jumping into what must to foreigners seem like a sure thing. When it comes to the world’s finest powder snow, the discrepancies in value placed on it by the locals and by the influx of foreigners cannot be understated, even now. Now that it is easier for foreigners to borrow in Japanese yen (thanks to Japanese bank loosening up their requirements) at laughably low Japanese interest rates, the obstacles to investing in Niseko real estate all seem to have crumbled away, and owning a piece of Niseko property has never been easier.

Little Fish Creative Studios launches a new service that is bound to be of interest to Niseko real estate and property agents, property managers, and property owners who are looking to maximize their rental income: NisekoVirtualTours.com.

Tours complete with 360 degree navigable interface and floor plans. People will be able to see every corner of the property from every corner of the property.

Buying property in Niseko or booking a ski holiday in Niseko can be very frustrating, people can’t just stop by Japan on their way home from work, check a place out, and be home in time for dinner. People often have to rely on word-of-mouth or the internet. The net also proves to be more of a jungle to be haphazardly explored than an able assistant that helps you select a property.

NisekoVirtualTours.com has the potential to be an extraordinarily powerful and informative guide that walks you through the village and lets you explore at a leisurely pace.

It turns out that all of the speculation about a large Hong Kong investment group taking over Hanazono from Harmony has proved true.

Richard Li’s PCCW (Pacific Century CyberWorks Limited) has apparently purchased a substantial stake of and most likely a controlling interest in the Hanazono ski area neighboring Niseko-Hirafu. Harmony was probably left with a small equity interest so that PCCW can get help developing the resort.

Richard Li is the youngest son of Hong Kong billionaire Li Ka Shing, and his PCCW has recently made some very profitable real estate sales on the back of some controversial purchases in the Tokyo area and is awash with cash… and it seems like he’s found a really good place to put some of it.

A recent drive through the Hanazono area revealed real estate signs by the dozen tacked to trees on the undeveloped land that hugs every curve and corner. As a planned resort on a grand scale, Hanazono has a clean slate, and it is less likely to be burdened by the lack of foresight and infrastructure that many of the investors and developers in Niseko-Hirafu have to deal with.

An announcement verifying the content of this article is scheduled to be made over the next month.

Is the Niseko property boom over? The boom that saw land prices in Niseko go up 5 to 10 times in 5 years? That saw Niseko-Hirafu properties appreciate 30% last year, the highest in Japan? The boom that has fueled non-stop all-season development here in the central Niseko-Hirafu village?

There are several schools of thought, that generally coalesce around an optimistic: “The profit-taking has occurred, development is underway. It is no longer a high-return investment, but a lifestyle choice that will retain its value while providing respectable returns.” So says the man on the street.

Time will tell. 80% of the property in central Niseko-Hirafu has been sold at least once in the last few years. We forget exactly how many blocks did not have title changes during that time, but they were the exception, not the norm.

Land prices have indeed stopped appreciating, so the emphasis has moved onto developing the acquired properties. This continues unabated. Condominiums and homes throughout Niseko are generally selling at AUD $400,000 and up, with some high profile properties in the “upper village” fetching up to and over $1,000,000.

Most of the local Japanese are skeptical as they have seen this before, during the bubble era. People flocked to Niseko with bubble cash to play golf and tennis in the summer and ski in the winter. Once the bubble popped, so did Niseko’s property market. Some claim that prices now have not even reached the peak bubble prices, and there is some concern that another “bubble”, be it Aussie or otherwise, could jeopardize the gains made here.

Well, we don’t think what we’ve witnessed here is a bubble so to speak. What we witnessed is something amazing that only happens when different groups (in this case Japanese people and Australian skiers) value things differently. The Aussies who arrived here realized that marketed appropriately, to the right customers (Aussie, Kiwi, and Asia-Expat ski bums) they were sitting on a gold mine.

Although prices have rocketed through the roof, an amazing thing in a country that has been in an economic funk for the better part of two decades, there is still the possibility that prices will go higher. Considering what it costs to buy a place in Vail, you could even call it likely, particularly if the infrastructure in Niseko catches up with the snow.

Our advice is still… BUY. Maybe you shouldn’t expect to double your money… but you definitely should expect to experience the world’s deepest, finest, most consistent powder snow. See you on the slopes!