Niseko Property Market Deals Nearing $1B Mark, Further Highlights Ski Resort’s Booming Economy
Niseko is on an unremitting expansion mode as a new report indicates the steadily rising ski resort town in Hokkaido, Japan is on the brink of breaking the $1 billion barrier in total business transactions. Thanks to a tourism industry that is growing non-stop in the last seven years, Niseko now boasts of a real estate market that appears to explode in unprecedented pace.
“New wave of hospitality-led real estate edges market close to USD1 billion transaction level,” consultancy firm C9 Hotelworks said on its latest market review of Niseko’s property sector. As of June 2018, foreign visitors to what is now dubbed as among the most favoured winter destinations by Asians and Westerners alike have more than doubled, the report added.
In 2017 alone, Niseko was able to attract around 1.7 million international and domestic tourists, and as the current year approaches its second half the data only points to robust projections. The C9 report indicated that foreign visitors now dominate the tourism scene in Niseko.
“Foreign visitor arrivals impressively outperformed the domestic segment with year-on-year growth of 17 percent in 2017 and a 5-year CAGR of 16 percent … Foreign visitors doubled due to direct flights from 17 destinations,” per the C9 report titled Niseko, Japan Property Market Review.
Abundance Of Reasons To Keep Tourists Busy And Happy
Since 2011, Niseko’s growth momentum did not display signs of letting up that the former Japanese farming town gradually transformed into a booming city with a firm trajectory for further economic expansion. Clearly on the horizon are property developments to meet the expected heavy demands coming from the inflow of tourists, many of them also intend to invest on real estate assets.
It is understood that at present the bulk of property buyers that Niseko draws in mostly originates from Asia and leading the pack are investors from Hong Kong, Mainland China, Korea, Taiwan and Singapore. Once upon a time Niseko was a magnet that tempts tourists and property buyers from Europe and other Western markets but it is now China that is the town’s foremost real estate customer.
“Asian real estate buyers have now supplanted the legacy Western source markets and Mainland China has been a leading cross-border property player,” the C9 report said, likewise predicting that the ski resort is in a strong position “to rise further in the development cycle in the coming year, led by a marked increase in hotel branded and managed projects.”
It’s easy to understand why Niseko has become simply irresistible for tourists and property investors alike. For the former, there were the “unique attractions, ease of visa procedures and emerging international flights,” that proved effective in putting the town on the global tourism map.
For the latter, Niseko is essentially a haven for investment as the key elements are there to encourage unimpeded and healthy investor activities. “Freehold ownership, a lower Japanese Yen and high capital gains have boosted the real estate market in Niseko,” according to C9, citing of double-digit growth indicators in the industry.
In 2017, the average selling price (ASP) of condominium units jumped by 12.5 percent, leading to a surge of 25 percent in the average built-up price in the same segment this year.
If the trend continues, and it appears there are no compelling reasons not to, the C9 report declared that Niseko is well on its way to breach the $1 billion mark in accumulated property market transactions.
The Road Ahead
Niseko’s incredible growth is seen to rapidly spread that nearby resorts are expected to experience the same boom. Soon, resort operations in Kiroro and Rusutsu are forecasted to tell their share of success stories.
Inside of the growth area, Niseko Village – a large swathe of skiable landscape that sits at the base of Mount Annupuri – continues on its path of rapid expansion, which according to ALFA Investors is not entirely unexpected. Since it is inter-connected with neighbouring ski operations like the Niseko Annupuri (a resort popular for its night ski courses and children-friendly features) and thus providing easy access to all things fun, the village is considered “a prime mover of progress in Niseko,” said ALFA Managing Director Jo Lodder.
Over the long term, growth in Niseko is predicted to take on an even more sustainable path as the resort town is seen to benefit from upcoming favourable legislation and government intervention, the likelihood of legalised gaming operations that will benefit the hospitality industry and the upcoming 2020 Tokyo Olympics.
The said sporting event will certainly train the tourism spotlight on Japan and pave the way for hundreds of thousands, if not millions, to make their way to the country. And it will be far from surprising that many of these prospective visitors will make a stop on Niseko.