Investor snowdown: Japanese real estate witness an avalanche of interest

Investors shift strategies to capitalise on regional hotspots, such as Niseko and Kutchan 

The captivating natural beauty, world-class ski slopes, and growing international recognition of Niseko have made it an enticing prospect. Flystock/Shutterstock

Despite the challenges posed by the global economic landscape, investors have recognised Japan real estate’s potential for stable income streams and capital appreciation, prompting a shift in investment strategies, reported RETalk Asia, citing the latest report from CBRE.

In particular, Nikkei Asia revealed that Niseko, a renowned ski resort town in Hokkaido, has attracted a flurry of investment from Hong Kong. Eddie Guillemette, the CEO of Midori no Ki (MnK) and chairperson of the PropertyGuru Asia Property Awards (Greater Niseko) judging panel, said: “The Hong Kong investors have been coming to Niseko for many years. They are sophisticated and have purchased real estate across the range from high-end designer homes to affordable, pre-fab apartments.” 

However, he acknowledged that developers and stakeholders will find it challenging to find common ground on sustainable growth in the Niseko community. He explained that even though the Japanese government has enforced developers to comply with the sustainable development goals (SDGs) in their construction methods, it was just the beginning. “Niseko has power, water, and human resource limitations that also need to be considered. The local towns are going to implement restrictions on growth, and it is to be determined how this will play out,” noted Guillemette. 

The captivating natural beauty, world-class ski slopes, and growing international recognition of Niseko have made it an enticing prospect for foreign investors looking to diversify their portfolios, according to The Asahi Shimbun. This influx of investment is contributing to the region’s development and its potential for further growth. 

Guillemette agreed, stating: “Niseko continues to be an attractive location for investors because it is unique — a world-class ski resort in Hokkaido with an English-speaking infrastructure, with amazing snow quality — and on a currency-adjusted basis, there is value here relative to other real estate markets.” 

He noted that the developers here have been responding to the demand of overseas investors by producing high-end, mixed-used apartment projects. “A few are building year-round communities of houses, with on-site management, activities, and services for both Japanese and foreign investors which is probably more sustainable and with lower price volatility over time,” shared Guillemette. 

Among the local developers that have taken matters into their own hands are the major titleholders at the PropertyGuru Asia Property Awards Grand Final 2022, including Blue Waves Group (Best Housing/Landed Interior Design – Asia and Best Completed Housing/Landed Development – Asia for Andaru Collection Niseko) and H2 Group (Best Completed Condo Development – Asia for HakuVillas). 

Related: The 5th PropertyGuru Asia Property Awards (Greater Niseko) 2023 celebrate popularity of Japan’s alpine market

Another area experiencing heightened interest is Kutchan, a town set to benefit from the anticipated bullet train development. The construction of the bullet train line linking Kutchan to Sapporo is expected to enhance accessibility and stimulate economic activity in the region. This improved transportation infrastructure and the projected increase in tourism have piqued the interest of domestic and international buyers, with Ski Asia highlighting the emerging opportunities in Kutchan’s real estate market.  

The Japanese real estate market in itself presents a dynamic investment landscape, extending beyond the boundaries of Tokyo. Investors are increasingly recognising the potential in regional markets, capitalising on factors such as natural beauty, infrastructure developments, and growing tourism. 

As the appetite for Japanese real estate continues to grow, investors are adapting their strategies to navigate this evolving market. The combination of stable income potential and the prospect of capital appreciation makes Japanese properties an attractive choice for global investors seeking long-term growth.  

Witnessed any award-worthy residential, commercial, or industrial projects in Greater Niseko? Nominate them for the 5th annual PropertyGuru Asia Property Awards (Greater Niseko) on or before 15 September 2023.  

Gynen Kyra Toriano, Digital Content Manager at PropertyGuru, wrote this article. For more information, email: [email protected].