By James Gallagher
Hokkaido Tracks Resort Properties sales and marketing manager
Niseko captivates – or captures – people in several stages. The first stage is the fun and excitement of the fabulous holiday experience. The second stage can very quickly follow the first – an initial investment in a Niseko-Hirafu resort property. And the third stage is where someone truly believes in Niseko – a second or third investment, or the development of a Niseko investment strategy.
These were some of the findings that emerged from a survey that Hokkaido Tracks Resort Properties conducted in May 2007 among its 100-plus investor base. The survey revealed hints into the purchasing habits of investors, which in turn yielded some clues into the true depth of the Niseko investment market.
For example, we asked how many times respondents had visited Niseko before purchasing, it seems the ‘best skiing holiday of their lives’ is the trigger for an investment with 42% deciding to purchase after a single visit. Interestingly, about 23% of investors purchase without even visiting Niseko, relying on research and/or recommendations.
When asked why they invested in Niseko, a majority of respondents replied ‘for long-term appreciation’ (67%), evidence that investors also clearly believe Niseko represents a good long-term investment proposition. But lifestyle is also a strong motivator, with 59% of people selecting ‘quality of skiing and boarding’ and 44% indicating that ‘a family retreat’ was a primary factor. Yield was a motivating factor for fewer investors (36%).
When asked ‘what do you intend to do with your property?’ a majority of buyers responded they would hold for 10 years or more (41%). They are presumably looking forward to enjoying the apartment or house for many years to come.
And that is where Niseko works its charms. The more these people visit, the more they are drawn into the wonderful world of Niseko and start building a Niseko portfolio. A remarkable 43% of investors indicated in the survey that they were ‘considering a second purchase or have actually purchased a second property.”
Some pursue an upper village and lower village strategy, hedging their bets between the condominium and the housing market. Some pursue ‘premium only’ strategy, seeking out only the highest end of the market — penthouses or premium houses. Some others pursue a property and land acquisition strategy.
The people at the ‘third stage’ are definitely the most astute investors. Convinced that the area is destined for long term growth and buoyed by earlier successes, they are more adventurous in their investment choices. They have strong connections in Niseko real estate circles.
So what are the third stagers shopping for at the moment? From where I sit the answer is simple — they look at everything, but are focusing on capital appreciation opportunities in locations not currently on the resort shuttle bus route. But whether it is location, selection of property, or investment advice, the third stagers understand that the driver of the best financial (and lifestyle) returns is quality real estate.