Japan’s Luxury Condo Boom Has Arrived In Hokkaido

Over the last several years, luxury condominium construction in Japan has spilled outside of the large cities, reaching as far north as Asahikawa, Hokkaido.

This high end market is defined by condominiums that cost JPY100 million (US$722,000) or more, which are dubbed okushon in Japanese, an amalgamation of “oku” (100 million) and “manshon” (condominium).

Several factors are driving the okushon boom, including pent-up, post-Covid demand from potential owners who amassed wealth during the era of restrictions, prolonged low interest rates and, for some wealthy buyers of advanced age, an increased appeal of downtown, near-station areas.

Premist, which launched in 2007, is the luxury condominium brand of Japan’s largest homebuilder, Daiwa House, and many units in Premist towers are okushon.

Premist Asahikawa The Tower will be completed in 2025 in Asahikawa, Hokkaido, located a few minutes away by foot from Asahikawa Station.

At 90m in height it is the tallest building in the city and the first such luxury tower in the Asahikawa area.

Wataru Sakaue, a sales representative for Daiwa House, explained that a total of 12 premium (okushon) units are located on the top three floors of the 25 storey tower, and that nine of these are already under contract.

In Tokyo, as in other international cities, luxury condominiums are often snatched up by foreign buyers as investments, but in Asahikawa the interest has been domestic.

“70% of the buyers are in the Asahikawa area and the remaining 30% are from Honshu [Japan’s main island which contains Tokyo]”, said Sakaue san.

The preponderance of domestic buyers in Asahikawa seems to reflect a larger trend in the high end condo market outside of Japan’s major cities.

H2 Christie’s International Real Estate Sales Director Paul Butkovich pointed out that aside from exceptions like Tokyo and Niseko, “these are domestic developers for the domestic market.”

Butkovich went on to say that big builders in Japan often follow a set formula and it is hard for them to break “the mould”.

But at least so far, as more of Japan’s construction and real estate firms experiment with higher end offerings like Daiwa House has done with its Premist brand, the more positive the response.

“For us it’s exciting because we know it [Japan’s luxury market] is an undervalued asset, ” said Butkovich, citing the historically weak yen and Japan’s reputation for robust construction.

“The whole industry is very good at putting buildings together.”

Sakaue san, recognizing the early success of Premist Asahikawa The Tower and other high-end condos away from the big metropolises, indicated more such development is in store for Hokkaido.

“We are looking to expand to other regional cities besides Asahikawa, if attractive condominium sites are available.”

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