International travel bans and a state of emergency have seen the highly tourist-reliant ski towns in Niseko and surrounding towns suffer from a steep fall in employment and a sharp uptick in vacant apartments.
Up until a few months ago, it was almost impossible to find vacant apartments in Kutchan, while rents in the town of 15,000 residents were similar to Sapporo prices. Now there are as many as 200 vacant rental listings, with some landlords offering discounts in order to secure tenants. The owner of a 5-story block of apartments in Kutchan Town had been renting out 19 of the 20 units to a foreign-owned hotel operator as staff accommodation. That operator gave notice in May that they would be cancelling the lease in July.
In late May, a home builder stopped land development at two locations in the town. One buyer had to cancel a purchase agreement after losing their job at a sightseeing company.
The employment situation in the predominantly tourist area is worsening rapidly. The six towns and villages of Kutchan, Niseko, Kyogoku, Rusutsu, Makkari, and Kimobetsu had a 1.18 ratio of job openings to applicants in April, down from 2.83 in October 2019. Many workers had been dismissed by tourism-related companies in March, flooding the market with job seekers.
Land acquisitions by foreign buyers have not slowed, with some overseas buyers actively seeking out what they consider to be stable investments amidst global uncertainty. In late March an 800 million Yen (approx. 7.5 million USD) penthouse in Setsu Niseko was sold to a foreign buyer, while another foreign investor paid 1 billion Yen (approx. 9.3 million USD) for two large holiday homes.
It’s not all smooth sailing for the investment market. In late April, Tokyu Land Corporation pumped the brakes on a planned purchase of the land under Hotel Niseko Alpen. Tokyu had entered discussions to buy the 8,800 sqm town-owned land last year. It has an appraised value of 2.8 billion Yen (approx. 26 million USD). The sale would have provided the town with a much-needed boost to their finances.
The Hokkaido Shimbun, June 26, 2020.
The Hokkaido Shimbun, June 20, 2020.
The Hokkaido Shimbun, April 12, 2020.
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