Niseko Real Estate Propelled By Hotel Brands Entering Market
Japan’s famed ski destination Niseko is well on its way to becoming a world-class year-round holiday destination back of sustained growth in summer visitors over the past six years. Last year over 1.6 million visitors were recorded, with parity in numbers between the frenetic December to April ski season and May to November summer and shoulder season.
The changes in the marketplace are also seeing the entrance of new properties under development with hospitality brands ranging from Park Hyatt, The Pavilions to Ritz-Carlton according to the newly released Niseko Property Market Review by consulting group C9 Hotelworks.
Two critical feeders of tourists to Niseko are the New Chitose Airport near Sapporo which has experienced an impressive 10-year compound growth rate of 13.9% and the introduction of Shinkansen bullet train service form Hokkaido from Tokyo in 2016. Key overseas flight growth from Seoul, Hong Kong, Bangkok and Singapore are stimulating regional demand and pushing the destination higher in the growth cycle.
Foreign investment into the hospitality and real estate sector can be seen by such groups at Malaysia’s YTL and Hong Kong tycoon Richard Li who is in the process of launching branded hotel residences which will be managed as part of a Park Hyatt mixed use project at the base of Niseko United’s Hanazono ski field.
Noting the trend in investment real estate with hotel managed programs. C9 Hotelworks report notes that recent condominium projects such as Skye and The Maples are eclipsing record setting pricing levels of USD17,000 a square meter. With soaring sales there is also a dynamic shift in the predominant international buying segment with the top 5 source markets being Singapore, Hong Kong, Taiwan, Thailand and fast moving Mainland China.
Looking at the property market metric C9’s report highlights that appreciation growth is ramping up, when comparing sold-out projects and those currently for sale pricing has escalated by 52% and the absorption rate more than doubled. Two bedroom condominiums continue to be the most popular property play but a new project The Ginto Residences by Hong Kong entrepreneur Gordon Oldham is seeing strong interest for their land plots and custom home offering.
Like many other global legacy ski destinations such as Whister, Aspen or Andermatt which over the years evolved, Niseko is now seeing the opportunity to become a leading year-around proposition. Sitting on Asia’s doorstep the strong natural appeal is seeing the numbers game mount by Southeast Asia travelers and a strong wave of Mainland Chinese tourists who are drawn by the clean air, diversity in culinary offerings and outdoor activities. Niseko in many ways has similar traits to iconic New Zealand and has a key advantage of being a uniquely Asian alpine experience.
Looking towards the future prospects, the connection between tourism and real estate in Niseko is similar to many other mountain resort areas around the world. Managing rental properties are typically early market movers but once the hotel brands come into play, that’s when things get interesting.
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