By Steve White
Pre-Covid-19 with visitors flocking to Japan’s northern island of Hokkaido in ever-greater numbers, the future looked bright for investors in Niseko, so what does it look like now as we start to move out of this pandemic!
Developers from China, Hong Kong, Malaysia, Singapore and Thailand have all unveiled significant projects in Niseko over the last few years and more are on the way. Big name openings in 2020 include projects from major players in global hospitality with the Park Hyatt at Hanazono, and the Ritz Carlton in Niseko Village. Dozens of other projects are underway or in planning.
With Hirafu getting busier, demand is increasing for property in quieter areas like Annupuri and Niseko Village. Lying at the margins of Niseko United, these are well placed for future expansion, as well as for forays further afield. For the avid skier or boarder looking for fresh pastures, there’s plenty of potential to access more of that stellar Hokkaido powder. If you don’t have a car or don’t fancy the winter driving, Niseko has convenient bus links to nearby ski fields too.
Closest is Moiwa, just minutes away from Annupuri. A small field that is a favourite ‘secret spot’, ideal for mornings after a good dump of snow, it too is expanding. New hotels and more lifts are on the way including an Aman property, slated to open in 2023.
A little further off lie the resorts of Rusutsu and Kiroro, while a host of guiding operations grant cat and heli access to backcountry areas such as Chisenupuri, Iwanai and Shimamaki for more experienced skiers and boarders.
Shinkansen Bullet Train Tokyo to Sapporo in 4hrs
National and prefectural authorities are responding to all the potential in Niseko be rolling out investments in surrounding infrastructure. Chief among these is the all-important shinkansen high-speed rail network which is edging ever closer to Niseko. Hokkaido only got its first shinkansen station at Shin-Hakkodate in 2015. Now work is underway on the many tunnels needed to push that line through the mountains to Niseko and on to its final terminus in Sapporo. This should bring an increase in domestic tourists especially, making Niseko less than five hours – possibly as little as four – from Tokyo. The current projected completion date is the end of 2030 but if Sapporo’s Olympic bid is successful, this is likely to be accelerated.
Shiribetsu Expressway nears completion - Sapporo to Niseko in under an hour.
The needs of road users are also being addressed. The first phase of the Shiribetsu Expressway, an extension of the Hokkaido Expressway, opened in late 2018. This shortens the journey from Sapporo by skirting Otaru, and the next phase, all the way to Kutchan, should shave off still more time.
Meanwhile, Hokkaido’s biggest airport, New Chitose near Sapporo, continues to attract more traffic. It only surpassed one million international arrivals in 2012 but by 2018 was receiving more than 3.7 million. An expansion of the international terminal is scheduled to open during 2020 to serve the growing number of connections across the globe. China’s share of arrivals is growing fastest, fuelled by increasing numbers of flights from Mainland cities, while places as diverse as Helsinki and Manila have added direct routings in recent years.
With Niseko one of Asia’s leading investment opportunities, it has drawn significant inflows of capital. In July 2019, Hotelworks, a hospitality consultancy, published their Tourism and Property Market Review. It reported that the total annual transaction value in Niseko’s condominium segment had hit US$1.3 billion, rising 44% year-on-year.
Huge land price growth
The Nikkei, one of Japan’s most prominent national newspapers, cited growth in land prices in the municipality of Kutchan, that includes two of the four Niseko resorts, of 58.8 percent in 2018, the highest growth rate in all Japan. That compares with a rise of 1.2 percent for Japan as a whole.
Still there appears to be plenty of room on the upside. Unlike many other well-established winter resorts in the rest of the world, Niseko is not hemmed in by extreme topography or protected wilderness areas. Instead there is an abundance of land, either entirely undeveloped, or in the hands of local – often aging – owners who have little if any opportunity to make a return on their current property.
Raku Ichi Residences Japanese Garden Entrance
Massive capital growth potential
According to the annual Ski Report published by real estate services company Savill’s, Niseko ranked only 31st among global ski resorts in prime residential land prices in October 2019, with an average price of 8,139 euros ($9,000) per square metre. That’s more than 60% cheaper than Courchevel 1850 in the French Alps, which led the list at 23,030 euros. Aspen placed second, while resorts in Switzerland, Austria and France claimed most of the other top slots.
Given still-reasonable prices, rising demand, a favourable regulatory climate and – of course – its unbeatable powder snow, it seems likely that Niseko will continue to be one of Asia’s strongest investment stories through the 2020s and into the 2030s. With the 1.7 trillion JPY tourist incentive package to encourage domestic & international tourism, when the 3rd largest economy sees that tourism is critical to their growth plan, then you will see this pandemic as an opportunity, and being the only branded ski resort, with the best snow in the world, skiers & boarders will continue to flock to Niseko from both the international and now the domestic market which in turn will drive up property prices and rental returns!
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Steve White - has more than 25 years’ experience in the publishing industry, much of it as an editor-in-chief for the Hong Kong subsidiary of SPH (Singapore Press Holdings). Specialising in the adventure and luxury travel sector, he headed up Action Asia magazine and contributed content to the group’s other brands including AsiaSpa, LP Luxury Properties and Jet Asia-Pacific, as well as for a slew of other regional titles. As an acknowledged expert on travel in Asia, he has been called on to appear at seminars and conferences around the region. He is a regular visitor to Japan and especially enjoys Hokkaido and snow boarding in Niseko