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Niseko’s future safe, but tough times still ahead

By 21st March 2009April 21st, 2021Niseko News, Niseko Real Estate

NISEKO’S real estate market built itself up into a seemingly invincible force, until this season.

In 2008-09, after around seven years of momentum, the town’s real estate trade experienced its first correction in response to the global financial crisis, a strong yen and a weak Australian dollar.

Powderlife spoke to several local real estate figureheads, who all remain confident that, in the long term, Niseko will bounce back to the prosperous days of old.

Many remain unsure about the short-to-mid-term forecast for the ski town, but what most agree on is the tough times aren’t over just yet.

The first person to open a bilingual estate agency in town, Niseko Real Estate managing director Ben Kerr, predicts that nothing much will change locally in real estate for at least the next 12-18 months.

"This winter we sold very little real estate, and it’s my feeling that next winter will be quiet again," Kerr said, who began NRE about seven years ago.

"It’s my guess that the current level of the yen is not sustainable and will drop a little, so even if the world economy gets slightly worse because the yen’s going to be cheaper, it will be easier for us to make sales."

Kerr also tipped a few changes to Niseko’s key market targets.
"We’ll always have Aussies coming across if we give them good nightly rates and the yen doesn’t do anything too silly," he said.

"We’ll also always have expats coming from throughout Asia to ski because of the good snow, but I also see a growing Japanese ski population coming through, who will stay for three or four nights in condominiums – a trend that’s here now in Hirafu.

"NRE is going to batten down and ride it out, while adapting to that changing Japanese market."
Niseko Property managing director Ruskin McLennan agreed with several of Kerr’s thoughts, adding that Niseko would see an increasing number of Asian developers entering the market in the coming months and years.
He also believes the number of new developments in Niseko will slow substantially.

"Consequently, we will see land values fall from the peaks of 12 months ago, and an increased focus on the resale market," McLennan said.

Hokkaido Real Estate managing director Jason King also foresees a drop in the development and construction markets due to falling property resale values.

He said the three-year outlook for Niseko had many variables, such as ‘exchange rates, the world economy and when Richard Li kicks off his Hanazono redevelopment’.

"Within the next year the price-reduced properties will sell, and then a fresh market can be established," King said.
"With a slowdown in construction, building prices should also return to the lower levels of five years ago, which will all be part of the new pricing mechanism.

"In any case, there are plenty of resales available, and at very reasonable prices, so it is hard to imagine that developers will be able to compete with the lower price points for a year or so."

President of West Canada Homes Paul Nikel remained positive for the future of Niseko due to its natural assets, such as the main calling card – powder snow, and plenty of it.

He did, however, add that the Niseko market correction may allow for reflection on long-term goals for the town.
"Growth will continue to be positive, but perhaps for the best will be a bit more rational and will take into account the long terms goals of the village," Nikel said.

"Niseko will always have some of the best and most consistent snow in the world, and as Asia emerges from the current crisis, demand will correspondingly increase.

"The village will continue to be popular with tourists throughout Asia, Australia and even into Europe.

"Our fundamental belief is that Niseko and Hokkaido is a beautiful part of the world and a great place to be.

"Over the past years many people have come to fall in love with the area the same way we have, and this will continue for many years to come."

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