AT the beginning of the 2011/2012 season, Powderlife reported that the Niseko real estate market had experienced a slowdown due to the strong yen, the aftermath of last year’s earthquake on March 11 and global economic uncertainties. Although buyers were cautious, they remained active and showed continued interest in the market here. The winter season is about to come to a close and we’ve collected some thoughts on how it went and the developments that lie ahead.
Ben Kerr, Niseko Real Estate:
Review:
This season was busier than we had expected. Niseko once again proved its resilience to external issues, and did what it does best – snow with a vengeance. The result was very positive attention from the world’s media and delighted holidaymakers. Investors remain cautious, but our job is really made a lot easier when the best powder snow in the world just doesn’t stop falling. This season a collection of apartments, small to medium sized land blocks, and a few existing lodge buildings transacted. Interest also remains for larger plots outside of the village, within 10 minutes access by car. We are yet to replicate the sales volume experienced pre-2008 global financial crisis, but despite the difficult conditions, numbers are up on last year. Being a buyer’s market, there are some good deals to be had, and this in itself helps to generate movement.
Projections:
Next season will definitely be busy, but we do need a 5-star international brand hotel to come to Hirafu. With the removal of older hotels like the Scot and Kogen (scheduled for demolition mid 2012), the resort will benefit from a higher grade accommodation experience for both overseas and domestic guests. And we need some good shopping inside too! These developments are due in the very near future with top of the mountain National Park regulations now being finalised.
Chris Lane, Izumikyo:
Review:
Since the earthquake last year we have sold several houses in the ¥25m-¥50m range to clients who primarily just want their own home and are not too fussed about where the market is headed. Most of my interest is still in homes within the Izumikyo 1 neighborhood, however we have sold a few other plots of land in the Kabayama area. For the most part everybody that speaks with us wants their own home and land, so that they can make the most of all the seasons without such a focus on ski-in ski-out.
Projections:
There is still serious interest from buyers, but the lack of financing and incredibly strong yen is deterring a lot of people from entering the market with only cash in hand. I feel that a lot of this supply would be swept off the market if either the yen weakened or some bank was brave enough to step back in and start loaning to foreigners. Interestingly, I have spoken to several banks, which have all commented that the people buying in Niseko are exactly the clients that they want on their books. We’ll have to wait and see what happens.
Grant Mitchell, Niseko Property:
Review:
The real estate market in Niseko this winter is in good health, despite being buffeted by last year’s Tohoku earthquake, the high yen and concerns about the global economy. Niseko Property has received a high volume of enquiries – from walk-in buyers, emails, and previous clients. Our office move to the Snow Crystal building (opposite The Vale Niseko) has raised our profile and has been a great success. We have already completed a pleasing number of sales and have a solid number of deals on the boil. Interest has been spread amongst a variety of different property types – with ski-in ski-out properties leading the way. There has also been renewed interest in properties outside the main Hirafu resort area with buyers securing land and house in “fringe” locations – offering a mixture of great value and stunning locations.
Projections:
Individuals and companies looking to secure strategic properties has reinforced our confidence in Niseko’s very bright future. Word about Niseko’s phenomenal snow levels this year is spreading and this will fuel growth in Asia’s favorite ski resort.
Matt Jones, Niseko Resort Design & Construction (RDC):
Review:
The winter has been surprising for many locals due to the number of visitors who have joined us here for their vacations. I think the numbers surpassed most peoples’ expectations. This has resulted in revived interest in several projects that were shelved due to the disasters in March as well as several new projects coming on board.
Projections:
I anticipate a busy year with positive growth for the construction industry locally.
Michael Davenport, Niseko Consulting:
Review:
Real estate movement and interest has been stronger than anticipated in 2011/2012 and Niseko Consulting has made several sales this season. We have also met many new clients excited about the potential in Niseko. We have seen a mix of investors; some looking for great deals spurred by the strong yen and others happy to pay top dollar for the right spot. We have seen most sales occur outside of Hirafu
Village but within a four-kilometre radius where prices still offer good value. We have had enquiries and interest around all the other ski areas too, which shows that investors continue to consider the entire Niseko resort as an attractive investment.
Projections:
We still have several clients coming to Niseko over the next couple of months and we are confident we will make a few more sales before the snow melts.
Robert Holmes, LJ Hooker:
Review:
There have been a lot of enquiries, both from walk-ins and email contacts. The volume of enquiries bodes well for the future; the present lack of urgency to commit to purchase can easily be turned around in a short period of time by the long awaited weakening of the yen or provision of finance. It would seem safe to assume that this current winter was affected by the disaster last March.
Projections:
As time passes, Niseko with its unparalleled volume and quality of snow will continue its march towards preeminence. The other good sign is the continued activity of larger and midsized developments, such as Shiki, M Hotel, The Loft, Kizuna and Akazora, which indicates a great deal of confidence in the future of the Niseko real estate market.