Niseko Real Estate & Property

Big things are happening in Izumi-Kyo II…

The entrance to Izumi-Kyo II is marked by the area management center, Restaurant Maru, and the Swiss-German styled Graubunden (well known for its sandwiches and cake).

Dotted with cabins and cottages, Izumi-Kyo is a managed community, complete with an organization that requires property owners to pay dues, keep their yards neat, and take turns making sure people observe some of the world’s strictest trash separation rules (there are literally scores of categories to divide your garbage into).

Izumi-Kyo has long been more popular in summer with domestic tourists looking for a slice of nature faw away from the big city, and there is no escaping the large groups from Sapporo and elsewhere sitting around a BBQ and lighting off small, safe, and mildly entertaining fireworks. Other popular summer activities in Izumi-Kyo include Fishing, Archery, and Tennis.

Until recently Imuzi-Kyo had missed out on the large-scale development and constant construction occurring in Hirafu, closer to the lifts. But Izumi-kyo is but a 3 minute drive from the lifts, and the boom has finally spilled from Hirafu into Izumi-Kyo in a big way. Construction surrounds this correspondent, waking him daily at 7:55am.

One large project is the two 3-floor townhouse buildings taking shape across from Okanda Rental Cottages: Shiki and Koyuki. Each building will have 2 townhouses. The developer states that, “Shiki and Koyuki Townhouses offer luxuries and space in harmony with japanese design sensitivities”. Maybe so, however they tower over Okanda, across the street (pictured below).

These signs are omnipresent throughout Niseko-Hirafu and indicate that the project underway complies with all relevant local laws and has been checked by the proper authorities.

This is Shiki: progressing nicely. Interior work well under way.

This is Koyuki: Foundation laid, scaffolding erected, all systems “Go”.

The area to the right of the Shiki & Koyuki project. It has been cleared as well, presumably for more development.

You won’t find any information online about “Stolt Holdings Pty Ltd”, as on the sign, but rumor has it some well-to-do Australian accountants with experience in Niseko-development are behind this project… best of luck to them.

The question on everybody’s minds is: are properties in Izumi-kyo II viable as luxury rental properties? It is a 30-minute walk in the snow from the lifts, along a road with a curved section with no sidewalks, menacingly referred to as “Death Alley” by last year’s winter staff, who had the fortune of traversing that section of road daily on their ways to and from work.

Certainly Shiki & Koyuki would be amazing for long stays, provided a car rental was included in the package (again: Shiki & Koyuki are but a 3-minute drive from the lifts). An extraordinarily convenient shuttle bus runs through Izumi-kyo II, but skiers paying upwards of $500 nightly for quality accommodation can be very difficult to please, and foreign tourists have higher expectations of the transportation infrastructure than the local foreign community or Japanese visitors in general. The jury is out on rental income, but there is no doubt that these properties would be amazing year-round dwellings or vacation homes.

倶知安、「外国人の存在感」一段と強まる

Increased Foreign Presence in Kutchan

冬のスキー客を中心に豪州など海外からの観光客の伸びが続く後志管内倶知安町で、外国人の存在感が一段と増している。昨年度に同町に建築の届け出があった建 物のオーナーのうち3分の1はスキー場周辺地区に投資する外国人。観光・飲食関連の雇用も拡大。倶知安地区の有効求人倍率は道内の他地区を尻目に、 14年ぶりに1倍を超えた。

The presence of winter ski tourists from Australia and other countries continues to increase. Fully 1/3 of the new building permit applications were filed by foreigners, concentrated primarily in the ski district on the outskirts of town (Hirafu). Employment also continues to grow in the food & drink and tourism-related sectors. The number of jobs in Kutchan has increased for the first time in 14 years.

倶知安町が昨年度に受け付けた建築確認申請122件の中でスキー場周辺は61件。うち豪州資本など外国人によるコンドミニアム（分譲マンション）などが41件を占めた（前年度は11件）。

Of the 122 new building applications in Kutchan last year, 61 were for properties in or near the ski areas. Of that number 41 were condominiums and like developments primarily funded by Australian investors, compared to 11 the previous year.

これらの建物が2007年度に入って次々と完成。昨年12月時点で町内のコンドミニアム数は41棟だったが、商工観光課では「今年度に80棟にはなる」とみている。

Those 41 should be completed in 2007, but according to Kutchan’s Business, Industry, and Sightseeing Department that number may be closer to 80 by the end of the year.

昨年度のスキー場周辺地区における外国人の延べ宿泊客数は約9万1400人と前年度より20％増。こうした”特需”が周辺地域を含め新たな雇用も生み出している。

The total number of “bed-nights” (a one-week stay for one person would be 7 bed-nights) last season numbered 91,400, an increase of 20% over the previous year. This has fueled explosive demand for accommodation and has helped bring about the attendant increase in employment.

Niseko property continues to be developed at a phenomenal rate on the backs of foreign investors and developers flocking to Niseko to play the property market. We hope some of them stick around to enjoy the world’s finest powder snow which is on its way in just a few short months. One of the more prominent properties under development in Niseko-Hirafu this summer is The Setsumon. Located between the Sencho Izakaya / Demo building and the Big Cliff Yakiniku restaurant on the main road across from the recently deserted Waza’s Cafe / Hokkaido Real Estate building (where rumor has it another big property will be under way soon).

The Setsumon is slated to have 10 fully furnished luxury apartments. With this village location you can’t really go wrong. On the main road leading up from the Seico Mart. You could probably ski right down the hill to your apartment if you were of a mind to ignore all of the mammoth signs lining the main street instructing you not to do so.

Like with all upper village properties close on this side of the village, each morning you’ll walk downhill to the Ace Family Pair Lift which whisks you up to the Ace Quad Lift near the Alpen Hotel. Then when you’re done skiing you just ski down to the Ace Quad again and walk down to your accommodation. No uphill trekking.

Here’s some raw data we came across on the NakayamaGumi website: Plottage 599.4 m² (181.319 Tsubo), Building Area 233.87 m² (72.258 Tsubo), Deferred floor space 1523.1 m² (460.738 Tsubo). Project will be 6 stories with a basement. First floor to include commercial space. Nakayama is also the head contractor for the Freshwater project taking shape near the base of the road that leads to the Niseko-Hirafu Gondola.

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!

There was some talk amongst us about which property to profile first, but as it turns out the answer was right there hovering to the left of Mount Youtei on our site’s banner image… Miharashi Apartments.

That is Miharashi (Me-Hah-Rah-She). We’ve heard it pronounced comically by the winter influx of powder junkies… “We’re staying at the Maharaji, mate!” Miharashi means “A Beautiful View” in Japanese, and is also the name of one of the most popular tree runs on the mountain.

Miharashi is located in the center of the village next to Mina Mina. It is a short walk from shops, bars, and restaurants. There are three 2 bedroom apartments on the first floor, and three two floor 3 bedroom apartments on the upper floors. There is also a shared basement with a laundry room and drying facilities.

It was developed by the same firm that developed First Tracks, Powder Tracks, and Youtei Tracks. Completed in 2005 with occpancy rates in winter hovering around 90%. The return on investment has been substantial, as these were completed while the Hirafu property market was still on its rapid 3 year surge.