Hanazono: Sold! To the Chinese fellow at the back

[thursday 1]

Nope, I stick to 1000 USD a night and 100 nights all year. That includes Summer, Autumn as well as Winter and Spring.

[Rag-Doll 0]

Niseko isn't a bubble in the strict sense. It looks that way when viewed from a domestic perspective but as was mentioned above, the prices aren't being driven by domestic demand. Compared to other world class ski fields, the prices to buy are slightly lower. A 2 bed room apartment in Falls Creek (ok hardly world class, but many of the same people buying) will cost somewhere around AUD400k or even more. The rent price is a bit higher because of the relative shortage of places to rent - that's obviously changing though.

 

Gaijin without long term resident visas have got bugger all chance of getting a loan in Japan without a Japanese person as a guarantor. One of the group is married to a Japanese national so we could have gone that route but decided not to as it was hardly fair.

 

Thursday,

 

There were 7 of us and we had contracts for two properties. The numbers were pretty sweet until the valuation screwed us. The bloke (a bubble guy) must have basically said, right, cement costs Y100 per kilo, there are 5000 kilos of cement in the building, 100 x 5000 = this, add in a few yen for the copper wiring, the paint at Y2000 per tin ..blah blah blah, your place is worth X.

 

We went our separate ways with 2 guys buying one place outright with the 5 remaining guys stumping up 60% equity and taking a 40% loan. the loan amount at the end of the day was pretty pathetic amount and life would be a bit easier with out the loan and mortgage. But at LIBOR + 2% (at the time 2.05% pa) the loan amounted to super cheap cash so we took it. for those of us who are still in the region, particularly the lucky bugger who still live in TY, it makes for a great holiday house.

[Rag-Doll 0]

 Originally Posted By: thursday

Nope, I stick to 1000 USD a night and 100 nights all year. That includes Summer, Autumn as well as Winter and Spring.

No chance. Summer rental rates barely cover the cost of opening the apartment. The place needs to be serviced and cleaned after each visitor whether they are there for a week or over night, costs the same but the summer rentals are weekend or overnighters. We close our place down during the summer.

80 days per yr at the max rate and even then you're not going to get 100% occupancy. With new places going up all the time the occupancy rates are going down. soon there will be an excess of apartments - the market will take time to adjust and then we'll start to see a drop in rental rates to maintain occupancy levels.

[thursday 1]

Even last year, I thought it was too late to get in and more a time to get out.

[Rag-Doll 0]

You're right, but depends why you buy. Our group are all Aussies and Kiwis. All except one lived long term in Japan and know we'll be back time and time again for the snow. If the place pays for itself and we have cheap holidays then we've come out on top.

[Go Native 70]

Rag-Doll property valuations here are based on what the Yakuba value the property at. This is what the banks will base the loan on. Just another crazy Japanese system that stifles investment. Any wonder why Japan has missed out on the property boom that has occured everywhere else in the world!! And I have talked to a number of people who have looked at investing in Tokyo. They have Japanese wives, are permanent residents and are eligible for loans. Basically the banks refused to loan them money because they weren't actually living in Tokyo!!! Another great policy to help stimulate investment! I adore living in this country but sometimes the way Japanese do things just makes me shake my head in total bewilderment...

[Rag-Doll 0]

GN, its just another item in a very long list of things that don't make sense in Japan. The country is interminal decline. I'm a big fan of Japanese culture, the people and the country in general but it is almost as if the country, its culture and soceity is heading towards an evolutionary dead end. It's hard to see how it can change as the percentage of geriatrics in the community increases there will be less desire to implement social changes. In one sense what is happening on a micro level in many smaller villages is also happening to the nation as a whole. It's frustrating because Japan could be so much better.

 

 

[Go Native 70]

I love the people, the landscape and climate but parts of the culture I'm not so sure about. The inability to challenge authority, this defference to people in power is one part of this culture that I think causes of many of the major problems in this country. Because authority is relatively unquestioned virtually nothing ever changes. Not only that but powerful people are rarely truly held accountable even when they do great wrong. Even when things are terribly inefficient and you point this out to a Japanese person they will generally just say 'yes but that's the way it's always been done'. This almost religious following of the status quo is certainly part of the interminal decline. The rest of the world is changing and Japan is slowly but surely getting left behind.

[Kingofmyrrh 0]

I have to offer a slightly contrary view about the banks - at the end of the day outside of urban centres land prices are still on the decline, and with structures attributed little value in the domestic market the land price represents the collateral on the loan. There are plenty of examples of lenders getting beaten up because the value, or at least true market value, of the collateral was insufficient. One example would be the original bubble, where market prices used for collateral were blasted after people woke from the dream. Another example, looking from a certain perspective, is the subprime loan crisis afflicting the States right now. Once those ARMs reset into their higher rates and people start defaulting, lenders will be stuck with the collateral - houses - which are presumably going to take large valuation hits as lenders try to get rid of them together in an environment where potential buyers are subject to more stringent credit checks for new mortgages.

Of course, rural Japan is not in a boom and bust cycle like those, but I don't see huge room for optimism with regards to large land price gains. Declining population (demand) / reduction of govt spending on public works which account for much employment in rural areas etc etc. I don't blame banks for not lending in the countryside, in the general case. I do think that Niseko is different, as to me the boom will slow but I don't see immediately why it should bust.

[Rag-Doll 0]

Fair Point. I reckon the Niseko boom looks like a boom because it is coming off such a low base. As I keep on saying, the prices being paid are not crazy in the global context, they just look high compared to kitamura next door with its population of 90 yr old farmers. The two aren't really being compared on a like for like basis. It's not like people are paying 10 times the price they would pay at whistler or something like that. We're not going to get to some stupid situation where one Niskeo studio apartment sells for more than a blackcomb hotel.

 

 

[HelperElfMissy 42]

 Originally Posted By: Rag-Doll

You're right, but depends why you buy. Our group are all Aussies and Kiwis. All except one lived long term in Japan and know we'll be back time and time again for the snow. If the place pays for itself and we have cheap holidays then we've come out on top.

You are too right here!!

 Originally Posted By: Fattwins

Mama what are you paying for your vacation?

A whole lot more than I would like to admit!!

And this is EXACTLY why we were considering investing in Niseko. We have 4 kids - that is 6 people - not small people either - my 14 yr old is 6ft tall! So teensy J-apartments do not suit us. Gondola Chalets are our pick. We thought if we could pick up a nice 4 or 5 bedroom condo or even house that we could use it ourselves once or twice a year - and have it pay for itself the rest of the season.

Doing it this way we will be spending LESS money than we are on our holiday rental costs. The problem for us is "readies". We do not have a spare Mill lying in the bank - nor do we have a completely unencumbered property to borrow against. We are about 5 years to early in our financial position to actually make it happen. However if the banks got thier stuff together we would buy in tomorrow. Looks like it will be a Jindy investment for us instead..

[thursday 1]

Just talked to a friend about financing a house in Niseko. At the drop of a hat she said rate is cof + 1.5% (that’s 2.62 floating) and secured on the investment products I already have at 50%. Then “when do you want it, I’ll draw up the papers”.

 

That’s how easy it is to get a loan in the HK banking system.

 

For 40mil Y equiv, you can get a nice 600ft 2-bedroom low floor flat in the unfashionable part of town here. Fortunately, just big enough to swing your cat or rat-dog if you have one and are in a habit of doing so.

[NoFakie 45]

This is the place we're building. The house next to the woods, not the shed(!) Inside is a massive timber frame that's about a hundred years old. That's Goryu skifield in the background. It takes less than five minutes by car.

 

We're building it mainly for us as our family home/office, but when I hear those rates in Niseko, on what sound like smaller properties, it certainly makes you think.

 

[Rag-Doll 0]

You're a lucky man Mr Wiggs. That is a pretty special place to be. Where I live, on a very good day, we can see the horizon but usually it is hidden by a grey haze.

[HelperElfMissy 42]

Thursday - I would be thrilled to pick up something in the Lower Village at this stage - just need it to be big enough to fit the King Sized family...

 

Mr Wiggles - GORGEOUS!

 

Good on you, guys!

As for me...one day...

[Fattwins 0]

His patio is where one of our downhill courses ends. Can you smell the Beers next season?

 

When I said bubble I was more talking about the area. Niseko property on the rise 40 minutes down the road they arent seeing crap.

 

Investment in Tokyo is huge you just have to know how to do it. My friends play markets in Tokyo and do well.

 

Thursday are you still sticking by 100 nights at prime rate or have you come down from the lsd high? If you like it that much then just freaking buy a place for crying out loud.

[Go Native 70]

I bought my house in Kutchan for only 4 mill yen! (a 2 storey 3 bdr house) It was a fixer upper and we have spent more than double what we bought it for renovating. Similar to what you seem to be doing Mr Wiggs, we stripped it back and started again but kept the original framework, minus a couple of internal walls to open it up a bit (the Japanese seem to love small rooms). Given time I still think that Kutchan will benefit from the boom in Niseko. Already I know a number of people who have bought down here. Eventually I reckon Kutchan will be the main place for staff to live and there has even been a foreigner buy a place down here for a holiday home. Probably need to be in for the long haul before there's much capital growth down here but hell it's damn cheap at the moment.

[Fattwins 0]

4 mill is cheap as chips. they are getting harder to find in some areas.

MR.W is really going to have a sweet pad full on J style.

[thursday 1]

Fatts, I love it up there very much, but I only spend 2 weeks max up there. And a prop of the same size and circumstance in Hakuba (though not really the circumstance as it's wilderness in comparison) costs 20mil.

 

 

[Mike Pow 52]

 Originally Posted By: Fattwins

When I said bubble I was more talking about the area. Niseko property on the rise 40 minutes down the road they arent seeing crap.

Is it that surprising? Travelling 40 minutes to go skiing is called commuting in Wales

[Fattwins 0]

That's called reality in Japan. You cant have a shrinking population and expect house prices to rise. Also the job market in Hokkaido isnt the strongest in Japan.

 

inheritance tax laws GN you better start studying about that. My mate nearly got wiped out by this. i have to inherit 2 houses in Kyoto but the funds have been set-up to cover the costs. I think my mother inlaw has 15mill plus tucked away to pay the tax.

[taguchi 0]

Inheritance tax law is indeed a big headache.

 

I wonder if so in all country?

[Tubby Beaver 209]

What is the reason that the government(s) taxes people on things they inherit?

 

The tax man bugs me!!

[HelperElfMissy 42]

Why do the WA Government retain Payroll Tax when it was supposed to be abolished with the introduction of the GST?

 

Because they can - and it is free money...

They will only make tax reform on these things when they need the votes from those people who are effected.

 

Cynical - I know - but I reckon we support a couple of hundred dole bludgers in WA with the tax we personally pay - and it really ticks me off!!

[Tubby Beaver 209]

I got 2000 dollars back from the Aussie tax man after my year working holiday, it was great, paid my way thru Malaysia and Thailand!!!