REAL ESTATE NEWS
By Thomas Shomaker
Photos: Park Hyatt
While COVID slowed down foreign investment in Niseko, agents say it helped consolidate interest in the resort from within Japan.
Agents say the Japanese market is now up to perhaps 10 percent of overall sales volume, a large change from the 3-5 percent they estimate was the volume five years ago.
While COVID eliminated the ability of foreign investors and visitors to enter the country, view property and meet with agents, the Japanese were still able to travel domestically.
With few other tangible investment opportunities during the period, COVID accelerated budding interest in Niseko from Japanese investors who were starting to gain interest in this “mysteriously foreign” Hokkaido resort.
Niseko Property Director Grant Mitchell said there was a long shadow from the 1980s Japanese real estate bubble and many Japanese investors just “don’t get Niseko”.
“Many Japanese investors are wary of seemingly too-good-to-be-true investments,” Mitchell said.
”The (Japanese) media’s constant references to the ‘Niseko Bubble’ hasn’t helped matters.
Grant MitchellNiseko Property Director
Changes in buying patterns from 2005 to today
Mitchell said until fairly recently, “Japanese buyers were mostly locals looking for low-end houses or small blocks of land to build modest houses on outside the resort areas.”
He says the first step towards greater engagement, “…was a significant increase in Japanese companies buying land in Kutchan town to construct apartment buildings on.”
“This happened in the last few years before the pandemic, in response to a shortage of accommodations for resort staff and those working in the local economy.
“The second change was the sudden increase in companies and well-off individual Japanese buying high-end condominiums — particularly in the Park Hyatt in Hanazono (since 2019),” said Mitchell.
What has given Japanese buyers confidence to invest?
H2 Real Estate Sales Director Paul Butkovich says there were two main drivers that kick-started the engagement of the domestic market.
“First the foresight of PCPD [Hong Kong-based owner of Hanazono Ski Resort] to engage Park Hyatt to operate their flagship hotel,” Butkovich said.
“And second the involvement of engaging Mitsui Fudosan [Japan’s largest real estate agency] who were successful in bringing the Tokyo market to Niseko.”
”Brands are important for the Japanese and they gave the market confidence to move.
Paul ButkovichH2 Real Estate Sales Director
“The pairing of a top hotel brand with a major well-known Japanese real estate company, Mitsui Fudosan, gave the project considerable credibility for a certain type of Japanese investor.”
Who are the new Japanese investors?
Butkovich said that the new Japanese investors are a mixed group, but did point out certain trends.
“Most of the Japanese investors we are seeing are either developers or very wealthy individuals looking to enhance their lifestyle and get involved in this unique and growing international community,” Butkovich said.
“Interestingly, we did meet and notice a lot more Japanese developers over the COVID period shopping around for land and looking for near-future projects.
“So I do expect to see more Japanese products coming to market.”
Mitchell said that there has also been an uptick in Japanese high-net worth individuals and celebrities purchasing in areas “a bit further from the resort, seeking larger blocks of land with a bit more privacy, nature and views”.
Background to Japanese hesitation
Butkovich says from the early 2000s, when foreign investment began turning Niseko into the international resort destination it is today, till just a few years ago, Japanese investors mostly sat out the market.
“As we all know there are ski resorts and golf courses riddled throughout Japan and a lot of them are either closing or suffering from the aging population,” Butkovich said.
“Plus to top it off the Niseko boom has been driven by newcomers to the region, who haven’t really had to connect with the Japanese marketplace until recently.”
Macro Engagement and Good Timing
The uptick in Japanese investments is matched by a national interest for the region.
In fiscal year 2030, Kutchan Station will become connected to the Shinkansen, or bullet train, cutting down travel times to everywhere, including chopping the rail trek to Sapporo from two hours to 25 minutes.
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