Asia’s wealthy head to Niseko

  • Luxury apartment and hotel boom
  • Turning into a world-renowned resort area

Hokkaido’s Niseko and Kutchan area is seeing a rush of luxury apartment and hotel developments. Known for its perfect skiing conditions, many Australians had purchased ski chalets and vacation homes in the town. The recent development boom, however, has been spurred on by Asia’s wealthy investors and developers.

Shiki Niseko

In Yamada, Kutchan Town, a 7-storey luxury condominium is nearing completion. The contact number for the sales office is a Singaporean number. The project, called Shiki Niseko, is being developed by Malaysian real estate developer, AP Land Berhad, who are targeting wealthy Asian buyers.

Shiki Niseko will have 68 units. A 3-bedroom apartment with 140sqm of living space will have an asking price of at least 130 million Yen (1.625 million USD) and almost all of the apartments with views of Mount Yotei are priced over 100 million Yen (1.25 million USD). Even local foreign realtors are surprised at the prices. A Japanese realtor said that the land was transacted at a price 10 times higher than what Japanese would pay. AP Land bought the 3082 sqm site in March 2008 for 579.5 million Yen (188,027 Yen/sqm). However, the developer indicates that apartments have the potential for high-capital appreciation.

Hong Kong developer, Pacific Century Premium Developments, have set up a sales office for their latest luxury apartments, and Malaysian YTL Corporation are progressing with plans to construct four luxury hotels.

One of the reasons for the growing popularity of Niseko is its relative convenience to the rest of Asia. Niseko real estate broker, Keith Rodgers, said the area is appealing because it is much closer than other popular destinations such as Aspen and Whistler, and is easy to visit for short trips. The quality of snow in North America’s ski resorts has fallen in recent years, which has helped to increase Niseko’s popularity even further.

Up until now, Australians have been the primary supporters of Niseko. Visitors to the ski fields and land prices have been steadily increasing. Residential land values in Kutchan Town saw the highest rates of increase in the country for the three years up until 2008 (based on the local government benchmark prices called ‘kijun chika‘). Between 2007 and 2008, land prices at a surveyed location in Yamada, Kutchan, increased by 40.9%.

More recently, however, the assessed land values (koji chika) for January 1, 2012, saw the value of land in Asahi – close to popular foreign resort and vacation home areas – fall by 8% from the year before.

“Although demand from Australians has fallen, the price of unsold apartments has not fallen” said Rodgers. “Most of the buyers are not investors, but are purchasing for their own personal use.”

As for Shiki Niseko, a representative from AP Land was quoted in a Singaporean magazine last December saying they had 30 reservations made on apartments, and only 2 cancellations following the Tohoku disaster.

Last Autumn, Gordon Wu purchased land in Hirafu and is building a 6-storey hotel with a private residence on the top floor. He has been making ski trips to Niseko for the past 30 years. Although originally planning to purchase an apartment, he decided to build his own development. His new hotel, Chalet Ivy Hotel (www.chaletivy.com), is scheduled to be open by December this year.

Guaranteeing a return in the summer months

There is no guarantee of revenue through the summer months, although there are efforts to make the best use of the area’s rafting, canoeing and golfing facilities to encourage long-term stays in the luxury apartments, which would otherwise be vacant during the off season. Hokkaido Tracks, who specialize in renting foreign-owned luxury apartments to domestic travelers, said that property values could increase if tourist revenue was maintained throughout summer.

Source: The Asahi Shimbun, April 7, 2012.

 1,294 total views,  18 views today