Dive into the world of Japanese luxury and read about the “Aspen of Asia” in Propeterra’s new exclusive series, The Niseko Brief.
The Niseko Brief, strives to explain the qualitative factors and real estate trends that are turning Niseko, Japan into one of the hottest international investing destinations. By combining background information with the comprehensive Propeterra Hirafu Listings Database, statistical methods and interviews with Niseko real estate agents we aim to bring exclusive insights to our readers. After introducing Niseko, our focus in later reports will turn to comparing the major real estate agencies, discussing Niseko’s evolution into a luxury destination, analyzing real estate asset performance and forecasting future alpha generation opportunities. For more in-depth analysis, join our Propeterra Family Office Center and gain access to our full coverage, including exclusive visualizations and econometric reports.
Niseko is a small ski town of about 5,000 permanent residents, located on the south end of Hokkaido, Japan’s northernmost island. The town is nestled in the valley between Mt. Niseko-Annupuri and the beautiful Mt. Yotei, approximately two hours from Sapporo, the regional capital of Hokkaido. It is this natural beauty which continues to draw tourists to Niseko year-round. While the last few years have seen the town become a true summer destination—more on this in forthcoming articles—it isn’t the mild July and August which drew fame, but rather Niseko’s cold, dry winters.
Fig.1: Mount Yotei, affectionately nicknamed the “Fuji of Hokkaido” for its conical shape, rises above the Niseko valley.
Niseko’s main attraction is its winter snow-sports; the region originally rose to prominence as a skiing destination owing to its consistently high quantities of light, dry powder snow. The Niseko Ski Area’s origins stretch back over a century, but it’s expansion and rise to fame began during Japan’s “ski boom” which lasted from the mid‐1960s to the late 1980s. Economic recession in Japan following the wake of the bubble economy led to a lack of investment in infrastructure which led to a rapid decline in tourist inflow. It was this which opened the door for opportunistic investors, mainly from Australia, who would drive its subsequent development towards prosperity.
As a result, Niseko’s subsequent history stands in stark contrast to the dismal picture painted by much of Japan over the past few decades. Many, perhaps a little facetiously, argue it was insulated from decline by its fluffy powder.
Niseko’s ski area consists of four connected resorts: Niseko Grand Hirafu, Niseko Hanazono, Niseko Village and Niseko Annapuri. Together, “Niseko United” averages the second highest snowfall per year (15 meters) of any ski resort in the world. Because of this, Niseko has become renowned in Japan, East Asia and beyond as an Asian ski‐resort that can go toe to toe with the premier resorts of Europe and North America.
Fig.2: An illustration of The "Niseko United" Resorts; Hirafu has the largest tributary area.
Given its proximity to the established markets of South Korea, Australia and Hong Kong, and the growing middle class of China, it comes as no surprise that development in this ‘Aspen of Asia’ is booming.
Real estate development in the area is generally concentrated in Hirafu, the most established of the “United” resorts. However, the other “United” locations are also seeing a boom, with international names like the Park Hyatt and the Ritz-Carleton scheduled to open hotels next year in Niseko Village and Hanazono, respectively.
Fig.3: A rendering of the Ritz-Carleton Hotel, scheduled to open in 2020
Its location, prime snow conditions and beautiful landscapes has caused Niseko to become the winter luxury destination for Asia’s nouveau riche. Moreover, with few regional challengers, Niseko’s dominance of the luxury Asian ski market looks set only to continue.
Upcoming articles will detail this boom more precisely, describing the hottest real estate agencies, asset classes, and individual developments while analyzing regional macroeconomics and local listing trends to give readers exclusive insights. Check back soon for more.
