Niseko, Japan Property Market Review, July 2020

Overview

 Niseko’s ski resorts have historically been the primary driver of its real estate market, with the epicenter being the Hirafu area. The property market is rapidly expanding outwards at greater velocity to Higashiyama – Niseko Village, Annupuri, Hanazono, and Moiwa due to the scarcity of prime development land.

NISEKO’S REAL ESTATE SALES PRICE AND PACE

The launch of luxury hotel branded properties, namely Park Hyatt Niseko, Aman Niseko, and Ritz-Carlton Reserve have achieved premiums over broader real estate offerings. The hotel brands are also raising the profile of the destination. At the end of last year, the transaction value of primary market condominiums and houses/land plots hit USD1.97 billion resulting in 24% y-o-y growth. 

According to the Ministry of Land, Infrastructure, Transport and Tourism, land values in Niseko sharply increased with a y-o-y growth of 60% for commercial properties and 40% for residential properties. Hence, we anticipate land prices are expected to experience muted growth despite the global pandemic, with certain areas experiencing surges when new high-end developments are completed. 

The average absorption rate of residential land plots robustly escalated by 38% in FY2019 and still achieved growth of 18% in H12020 despite COVID-19. We expect that land plots in Hanazono, Higashiyama, and Moiwa continue to have potential for appreciation. Also, the nearby alpine resort areas of Kiroro and Rusutsu are attracting resort-grade development, though lower pricing points are a function of less costly underlying land values

While the Niseko’s condominium market has seen a reduced sales pace due to a sharp uptick in new properties, there are starting to be supply concerns. Some developers have diversified to houses and land plots which are seeing more speculative investment-oriented buyer interest. Our expectation for Niseko real estate is that it will continue to evolve into a more mature and stable marketplace, although it is likely to experience some volatility in the condominium segment.

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