Hokkaido is famous for its quaint towns and powder snow.
Luxury ski resorts in Japan’s north are becoming all the rage among visitors and property investors alike. We investigate.
By Romesh Navaratnarajah
Although interest in ski resort properties cooled following the 2008 Global Financial Crisis, investor reluctance appears to be thawing, as many global high-net-worth individuals (HNWIs) are now looking to own alpine homes, which have become a status symbol.
According to a 2014 (Knight Frank) survey of wealth advisors representing 30,000 ultra-rich individuals, around 25 percent of those polled in China and 11 percent in Singapore were interested in owning a ski home, especially ski-in ski-out accommodation where the ski slopes are right outside your door.
With the renewed interest, prime property prices in major ski resorts worldwide rose by 5.9 percent in the year to June 2014, revealed data from the consultancy. The price index reached its lowest point in June 2009, but had since risen by 14.9 percent.
Asia’s own Aspen
In Asia alone, there are hundreds of ski resorts, but very few can compare to Niseko in Hokkaido. Dubbed the “Aspen of Asia”, the small town is famous for its fine, powder-like snow.
“Considered one of the snowiest places in the world, Hokkaido has been bestowed with the finest snow which falls consistently every year, thus attracting many ski enthusiasts from all over Asia Pacific,” said Low Su Ming, Executive Director of Low Yat Group, a major Malaysian player in Niseko.
Aside from Niseko’s rugged beauty, she noted that the shorter travelling time compared to long flights to Europe and the Americas has also contributed to the rising number of wealthy Asian investors looking at ski resort properties in Hokkaido.
In addition, the area is easily accessible by train and bus services, while Japanese food and culture appeals greatly to many Asians.
Meanwhile, the Japanese Yen has fallen from ¥77.50 = US$1 in November 2011 to ¥122.54 = US$1 in November 2015, making the country more attractive to potential investors, noted Low.
Aussie connection
Despite the Yen being at a low point, sources told PropertyGuru that Hokkaido’s economy, which is based mainly on food production, has remained stable. But after the discovery of Niseko’s good quality snow some years ago, Australian skiers started investing and creating a community of their own. Since then, more tourists have been flocking there.
As Hokkaido’s popularity is still in its infancy, Low believes many investors will see growth opportunities in the area.
“Hokkaido is similar to Bali or Phuket when it was first discovered. There is a huge potential for growth here. As for tourism, it is becoming an all-season destination. There are plenty of things to do in Hokkaido that are still new to visitors from Asia and elsewhere.”
In a blog post on 360niseko, a website dedicated to information about the town, Keith Rodgers, President of Niseko-based Taiga Real Estate and Project Management, wrote that it is witnessing “the best tourism numbers since 2007”. According to the Niseko Tourism Board, visitor numbers soared by 103 percent during the 2011 and 2012 seasons.
While Niseko’s property market had been dominated by Australian and Hong Kong buyers in the past, nowadays they are coming from Singapore, Malaysia, and increasingly, from Indonesia, Thailand and Taiwan, said Rodgers.
Holiday home
So what are they looking to buy in this snowy location? In the case of Low Yat Group’s Shiki Niseko project, the majority of investors are interested in lifestyle investments, specifically a vacation home, shared Low.
Shiki comprises 68 luxurious apartments on a one acre plot and includes 10,000 sq ft of retail space and restaurants. Its unique location means that all the residential units offer breathtaking views of either Mt. Yotei or the steep slopes of the Grand Hirafu Ski Resort on Mt. Annupuri.
“Most of the units are on leaseback arrangement. Owners enjoy a duration of stay during the year whilst the hospitality arm manages the property based on a pool revenue sharing system at other times of the year. Hence, they receive returns in the months that they aren’t occupying the unit.
“These types of properties are gaining popularity, and Shiki Niseko was the first luxury property to start this type of investment.”
When asked to name one hotspot in Niseko, Low points to Hirafu Village and Kutchan, which are the town centres located close to ski lifts. “There are plenty of ski activities to be found here, while restaurants, cafés and shops are all within walking distance.”
Money matters
Borrowers looking to get a loan for Japanese properties outside of Tokyo will find it tough to do so in Singapore, but the process is much easier through Malaysian banks, according to Low.
In Japan, home loan interest rates are around 1.8 percent to two percent and savvy investors will usually seek the best rates and packages available in the market before making a purchase.
Low reckons that now is a good time to buy a ski resort property, as housing and land prices have already tripled over the last two years. At the same time, Hokkaido has seen many developers entering the market to build new resorts. Right now, rental yields are in the range of two to five percent, depending on the property type and the level of service.
She added: “Demand for accommodation within the area has also increased, especially during the winter season. This comes as the number of tourists flocking to the area rapidly increases every year.”
In fact, most of the resorts and apartment units were fully booked last winter, and tourists found it difficult to secure accommodation even three months before, said a source.
CITY FAST FACTS
(HOKKAIDO)
Population: Around 5.6 million
Total area: 83,457 sq km
Currency: Yen
GDP per capita: US$33,896
GDP growth: 0.1 percent
Future transport: Extension of the Hokkaido Shinkansen (bullet train)
Ski resort prices: Up three times over the last two years
Distance from Singapore: 5,940 km
Summary of major property related issues and taxes associated with real estate investment in Hokkaido: http://bit.ly/1WP8p5C
INTERNATIONAL HIGHLIGHTS
Niseko is home to some of the world’s top ski resorts, which see high demand from wealthy travellers. Here are two new developments you should check out.
COMPLETED PROJECTS
Shiki Niseko
Abuta District, Niseko
Type: Condotel
Developer: AP Land Berhad
Tenure: Freehold
Facilities: Housekeeping services, fully equipped kitchen, ski equipment storage, drying rooms
Nearby Key Amenities: Michelin Star restaurant, gourmet food store, coffee bar, car rental services
Nearby Transport: Shuttle buses, Kutchan railway station
Starting Price: Approx. S$968,000
This luxury landmark condotel is located in the village of Hirafu, comprising 68 units of one- to three-bedroom apartments with amazing mountain views.
Boasting a contemporary Japanese aesthetic, the hotel-style condominium was completed in 2012 and is operational all year round.
First-class facilities include housekeeping services, a fully-equipped kitchen, storage spaces for ski equipment and drying rooms for skiers.
An exquisite Michelin Star-rated restaurant, gourmet store with fresh local produce, and an inviting coffee bar are also available for guests.
Akazora
Abuta District, Niseko
Type: Luxury apartments
Developer: Niseko Resorts Group
Tenure: Freehold
Facilities: Concierge service
Nearby Key Amenities: Japanese restaurants, bars
Nearby Transport: Shuttle bus service, Kutchan railway station
Starting Price: Approx. S$488,000
Situated in the heart of Hirafu village in Niseko, which has been dubbed the “Aspen of Asia”, this development features 25 fully-furnished apartments.
Units range from studios to two-bedroom units up to 956 sq ft, with a spacious four-bedroom penthouse at 1,560 sq ft.
Completed in 2013, Akazora is an eye-catching building that blends Western and Japanese design elements.
The boutique project is just a stone’s throw away from Niseko’s famous ski slopes, popular restaurants and bars. It is also conveniently located near a ski shuttle service.
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