Why Does Niseko Have Japan’s Highest Property Price Rise? Tips for Successful Real Estate Investment!
2023.11.26
To start with the conclusion, the reasons behind Niseko’s status as the top region in Japan for land price growth for six consecutive years (as of January 1, 2020), include:
1.The lodging demand from tourists worldwide, drawn by Niseko’s winter powder snow and summer activities.
2.Niseko’s inbound strategy focused on wealthy foreign visitors.
3.Significant lodging demand from affluent foreigners for condominiums.
In this article, aimed at foreign investors interested in real estate investment in Japan, we will delve into:
・The current trends and future outlook of land prices in Niseko.
・Reasons behind Niseko’s leading position in Japan’s land price growth rate.
・Key strategies for successful real estate investment in Niseko.
Stay tuned as we explore these aspects in detail, providing valuable insights for those eyeing investment opportunities in this sought-after region!
Niseko: Six Years at the Top in Property Price Growth
Let’s delve into the current state and future outlook of Niseko, which has achieved the highest rate of property price increase for six consecutive years.
Niseko: A World-Famous Resort
Niseko Mt Yotei
Niseko, one of Japan’s leading ski resorts, is known for its Mount Yotei, often compared to Mount Fuji.
As the main peak of the Niseko mountain range, it draws tourists worldwide for its powder snow.
The green season from spring to summer also offers rafting in the Shiribetsu River, cycling and hiking at the base of Mount Yotei, and golf.
Making Niseko a year-round destination for global visitors.
Niseko’s Real Estate Market Today – Trends in Property Prices
Overview Map of the Niseko Area (Niseko Town & Kutchan)
Niseko (Niseko Town and Kutchan) has become a global tourist destination.
According to the National Tax Agency’s road price announcement (as of January 1, 2020), it has the highest land price increase rate among 320,000 standard residential sites nationwide for six consecutive years.
Particularly, the Hirafu Slope area, the center of Niseko Resort, has seen the highest increase in land prices.
Soaring to about 14 times its 2014 value, from $333 per square meter to $4,800 in 2020.
Additionally, the central residential area of Kutchan has seen a 44.0% rise in residential land and 57.6% in commercial land.
Maintaining Niseko’s top position nationally.
The chart below clearly shows the steep rise in Niseko’s land prices.
Niseko Hirafu Slope – Roadside Land Prices Trends (Price in Yen per Square Meter)
Quoted from “The Current State of Niseko Hirafu Slope! ~ Annual Land Price Increase of 50%~“
The Future of Niseko’s Real Estate Market
As for the future of land prices in Niseko, there is much anticipation for continued growth, for two main reasons:
1.Niseko is still largely undeveloped and in a maturation phase.
Compared to other urban areas like Tokyo, there’s a significant presence of low-use land and vacant spaces in Niseko, indicating ongoing development.
2.The upcoming inauguration of the Shinkansen and highways is expected to enhance accessibility.
Leading to an influx of tourists and further land price increases.
By 2030, the Shinkansen will connect Tokyo to Kutchan (Niseko) in about 4 hours and Sapporo to Kutchan in approximately 30 minutes.
Quated from The Hokkaido Shimbun Press
Additionally, a new highway opening in 2027 will cut travel time from New Chitose Airport to Niseko/Kutchan by 20%.
Reducing it to just 2 hours.
The evolution of Niseko’s land transaction prices remains a focal point for keen observation.
Why Does Niseko Lead in Property Price Growth in Japan?
The significant rise in Niseko’s property and land transaction prices can be attributed to three main factors:
1.Demand for Accommodation from Worldwide Tourists Seeking Winter Powder Snow and Summer Activities
2.Inbound Strategy Focused on Wealthy Foreigners
3.High Demand for Condominiums from Wealthy Foreign Visitors
Demand for Accommodation from Worldwide Tourists Seeking Winter Powder Snow and Summer Activities
Niseko draws a large number of international tourists, particularly for its powder snow, significantly boosting accommodation needs.
This demand has spurred developments like hotels, propelling land transaction prices upward.
Initially, Australian tourists seeking powder snow began flocking to Niseko in the early 2000s.
With Japan being geographically close and having a minimal time difference, Niseko became an attractive ski resort destination for Australians.
Further, the 2008 Chinese film “If You Are the One,” set in Hokkaido, amplified Niseko’s popularity.
As a box office hit in China, the movie made Hokkaido, and particularly Niseko with its powder snow and diverse slopes, highly popular among Chinese tourists.
Inbound Strategy Focused on Wealthy Foreigners
Niseko has strategically targeted wealthy foreigners, attracting significant foreign capital and leading to the development of luxury hotels and villas.
In 2020, Hyatt Hotels and Resorts opened Park Hyatt Niseko Hirafu, following its success in Tokyo and Kyoto.
Moreover, Marriott International launched its first Ritz-Carlton Reserve in Japan in Niseko.
The continuous flow of foreign investment in Niseko shows no signs of slowing, with increased construction demands for resort staff housing and rental properties for construction workers.
The weaker yen, making investments more accessible, has further accelerated real estate investments in Niseko.
High Demand for Condominiums from Wealthy Foreign Visitors
The demand for condominiums among wealthy foreign visitors is another key factor driving Niseko’s property price rise.
Condominiums, complete with living spaces and kitchens, are popular among wealthy foreigners who prefer long-term stays, offering a home-like experience.
These condominiums provide dual benefits: profits from property value appreciation and operational profits from rentals.
The high demand for such investment properties among foreign investors, coupled with the influx of foreign capital, significantly contributes to Niseko’s property price surge.
The future trends in Niseko’s property prices, with continued high demand and upcoming infrastructure developments like the Shinkansen (bullet train) and new highways, are certainly something to keep an eye on for any investor interested in Japan’s real estate market, particularly in Niseko.
Mastering Real Estate Investment in Niseko: Key Strategies for Success
Given Niseko’s remarkable growth in property prices, numerous investors are considering real estate opportunities in this area.
This article will provide three pivotal strategies to succeed in Niseko’s real estate market, especially appealing to foreign investors intrigued by Japan’s thriving property price trends.
Understanding these essential tactics can significantly enhance your investment journey in the lucrative Niseko market.
1.Research Local Tourist Needs
Niseko, a resort destination, primarily attracts tourists.
⑴Start by researching what tourists look for in accommodations.
Failing to meet their needs can result in poor utilization of your property, regardless of its location’s appeal.
Consider objective factors like the nationality and preferences of tourists when selecting your investment property.
⑵Also, understand Niseko’s unique aspects.
For example, installing a carport can be beneficial.
Niseko lacks developed public transportation, making cars essential.
However, heavy snowfall makes parking maintenance challenging.
Carports, solving this issue, are popular among local lodgers.
⑶Visit Niseko to grasp its unique features, which often become apparent only upon visiting.
Experience its allure firsthand to reflect it in your investment property.
If you have time, a visit to Niseko can provide valuable insights.
2.Opt for Property Management Services
If managing the property yourself is challenging, consider hiring a property management company.
Cleanliness is a key factor for lodgers when choosing accommodations.
Regular cleaning and maintenance by a management company can maintain your property’s cleanliness, ensuring a comfortable stay for guests.
Invest in facilities without hesitation to enhance guest comfort, leading to positive reviews and attracting repeat and new guests.
Compare different management companies to choose the best service and price.
carport
3.Plan for the Green Season
The spring-to-autumn “Green Season” sees noticeably less lodging demand compared to the winter “Ski Season,” necessitating a strategy for this period.
While Niseko’s “Ski Season” is peak time for lodgers, the “Green Season” offers golf, rafting, cycling, hot springs, and more.
However, lodging demand still falls short of the Ski Season.
Consider renting your property monthly during the Green Season for stable, though lower, profits.
In contrast, daily rentals during the Ski Season can maximize earnings.
Strategizing for the Green Season is essential in Niseko’s property investment.
Unlocking the Secrets of Niseko’s Soaring Property Prices and Investment Success
In summary, the consistent top ranking of Niseko as a popular resort destination with the highest property price increase in Japan for six consecutive years (as of January 1, 2020) can be attributed to:
- The year-round tourism demand fueled by winter’s powder snow and summer activities.
- A targeted inbound strategy focusing on Niseko’s wealthy international clientele.
- The significant demand for condominiums among affluent foreign visitors.
To successfully invest in Niseko’s real estate market, investors should:
- Research customer needs carefully.
- Consider professional property management services.
- Develop strategies for the quieter ‘Green Season.’
However, if you’re seeking more in-depth insights into real estate investment in Niseko, especially regarding the increasingly popular vacation rental operations, we have prepared a detailed article for individual investors.
This guide is a must-read for foreign investors interested in Niseko’s property market and its lucrative potential.
If you’re interested in vacation rental management or seeking consultation on vacation rental investment, please don’t hesitate to contact us!
