Jump to content

Recommended Posts

Originally Posted By: Gtrain
Property in a Ski field (especially somehwere like Niseko etc) is not just a financial investment it has to be looked at as a lifestyle investment. You have to really want it for personal reasons aswell, otherwise who is going to look at a place with sporadic cash flow, higher maintenace and forex risk.

Absolutely.
Link to post
Share on other sites
  • Replies 279
  • Created
  • Last Reply

Top Posters In This Topic

"Lifestyle investment" sounds like a bit of an excuse for something you buy that's kind of supposed to make money but doesn't really in reality. The obvious hole in the logic is that the more money you make with your spare cash, the less you can work and the more money you will have to actually go on holiday.

 

Folk have always had holiday homes, and it would be great if everyone could have one. Rebranding them as "lifestyle investments" sounds too much like simply regurgitating crappy advertising copy to me.

Link to post
Share on other sites

For some people, Money is for spending... and health is wealth.

Remember we take nothing to our graves.

I think the terminology comes from people who feel guilty about spending and not making money. Strange when you think some people don't feel guilty because they make too much.

Still stranger when everything is a gain or loss equation.

 

Obviously some people only look at ownership, because that is an investment, and renting which can be a better lifestyle is not because there is no $ return.

Link to post
Share on other sites

Who cares what it's called. You bought it to use it. No ones rebranding anything. The term is used loosley to refer to a property that you can use aswell as rent.

If you wnat sound bankable returns buy somewhere else.

 

If you have a holiday home and don't rent it. Try negative gearing it.

Link to post
Share on other sites

Most of the owners here are happy enough to cover their costs each year so that they don't have to keep plowing money into the investment. If they make a bit extra then that's a bonus. Obviously they are hoping that there are capital gains over the time they own the property which is where they can make a profit if they sell. Plus they have their own place to stay when they come here skiing.

Up until the GFC captial gains here were the highest in Japan by a long way and were up there with any booming property market worldwide. It was a great investment and plenty made a whole heap of money (myself included biggrin )

Since the GFC prices have stabilised or reduced but I see no reason why they won't recover and go up again in the future. Remember the market here is not the Japanese market, so there's no use comparing it to that.

Link to post
Share on other sites

You seem happy to think that Niseko doesn't provide good returns Mr Wiggles (even though it has for hundreds of investors over the years). Is it just me or do others get the impression that many on here want to see things fail up here? wakaranai

Link to post
Share on other sites
Originally Posted By: Go Native
Most of the owners here are happy enough to cover their costs each year so that they don't have to keep plowing money into the investment. If they make a bit extra then that's a bonus. Obviously they are hoping that there are capital gains over the time they own the property which is where they can make a profit if they sell. Plus they have their own place to stay when they come here skiing.


That is how I see it in a nutshell.

Papa and I would like to buy something in a ski resort somewhere, at some stage. If we break even by renting it out/having it property managed - AND get to stay in it for (say) 4 weeks a year we would be happy with that.

You see if we owned our own place in Niseko we could have some owners storage and leave more of our personal comforts there - perhaps powder boards (and just have our shorter boards here in Perth). We could also ensure the apartment was stocked with the things WE like to have - like a proper coffee machine - a crockpot - and a stick blender! If it had a garage space we could also buy a car that could be included with the rental package, and provide extra convenience.

Those advantages (and many more besides) and a break even situation would make us smile. Broadly.
Link to post
Share on other sites

It seems like some of you people want to invent an agenda for me. Well, I know most of the guys selling property in Hakuba and own a nice place myself, the details of which are none of anyone's business. If ski resort property goes up, ourselves and our friends could do very nicely thank you. Conversely, if Niseko crashes and burns, Hakuba will only do worse. Anyone with half a brain can see that. Niseko is the litmus test for o/s folk skiing in Japan. Failure there means failure everywhere. Noone is going to rush off to Rusutsu or Furano or Hakuba or anywhere to do it properly the next time. Prolonged success for Niseko is in everyone's interest.

 

If something doesn't make money, it is not an "investment". That is what the word means. I don't think potentially "up to 4%" (Vale's own numbers) for massive forex risk is a good investment. They are charging folks for over 50% of rental returns in commissions and costs. The management firm and the developers sound like they'll do brilliantly for sure, with none of their own capital down because its all coming from the "lifestyle investors". If the owners can get some tax writeoff/depreciation thing going, maybe they'll do okay too, but that is not how you judge standard investments. If the Vale is a success, it is nailed on that more building will happen in Niseko, or if not there, in other resorts in Hokkaido where the powder lasts longer. Apartments in Niseko that aren't as nice used to be sold as being the best thing in town with the tagline of 8% returns. I think you can see where things are going. The Vale's website talks of "infinite growth potential". If its all about lifestyle, why talk of "growth", let alone "infinite growth"? As Jynnx says its just about deluding people into justifying luxuries as sub-optimal investments.

 

GN the folks who made real money in Niseko got in early with land or old but usable pensions seen as worthless by the Japanese. Are you saying that people can still get in early? Past performance blah blah blahdee blah. If the Vale was a genuinely good investment, they wouldn't ask Tom Dick and Harry for the capital to build it. Hedge funds would be queueing up. They own lots of big city hotels already.

 

What Japanese ski resorts need is sustainable growth from the foreign market. Its the developers who gain from bubbles, not the towns or "investors" late to the party. Perhaps Rome lasted so long because it wasn't built in a day with creative financing.

Link to post
Share on other sites

I wasn't referring to you Mr Wiggles, sorry if it came out like that.

 

I know of one or two narrow-minded people in Hakuba who would love to see Niseko be toppled. I have little respect for those people anyway but they do exist.

Link to post
Share on other sites
Originally Posted By: AET
I'm still going to enter the Giveaway though and hope to stay there for 3 nights wink


I might do myself! I did say 50,000 a night for a brand new 2-bed slopeside flat wasn't expensive.... wink
Link to post
Share on other sites

Mr Wiggles I like to look at a resort like Whistler as a good example of a successful international ski resort. The property market there has gone through major ups and downs over the last 20 or so years but like most property markets the next up was always more than the previous one. No property market in the world just goes endlessly up without there ever being a period where growth declines momentarily or stagnates for awhile. Certainly if you bought a new property in Niseko currently you would not expect rapid capital growth in the next few years like there was over the last few years. Longer term though I see no reason why demand will not grow again and prices rise once more. Any investment is a risk, some get in at the right time and some encouraged by the 'hype' often get in late in the cycle and can be caught out if they were looking for a quick turnaround profit on their investment. That doesn't mean it's a really bad time to be buying in the area. As long as you have a longer term outlook then with some of the resale bargains going at the moment you could still do very well out of purchasing now. Unlike most property investment in Japan it's not the rental return you worry about it's the potential capital returns where the real profit is made.

Link to post
Share on other sites

I think Wiggles has summed this up well. I can't see why Niseko is different from anywhere else in the world, including resorts as I pointed out in the case of Queenstown (which is an entirely different league as a tourist destination). Here's some of my perceptions:

 

-- Niseko has been driven by Aussie investment and development, pure and simple. I'm not saying that's a bad thing but there are attitudes towards property in Australia that are somewhat unique, particularly the hoopla about capital gains. It was exactly the same with QT until people realized that easy credit was driving development, not long-term sustainability or even medium-term demand.

 

-- The developers have made the best return in Niseko and will continue to profit through property management. Is there anything wrong with that? No, but as Wigs points out, there is significant risk involved for the "lifestyle investor." I'm skeptical that one can balance investments with lifestyle. Think time share. Think Glengarry Glen Ross. Those with the moolah don't need their holiday home to provide a ROI, and those that do need to start seriously thinking about due diligence.

 

-- "It's never a bad time to buy property" is a cliche that deserves particular scorn during the aftermath of arguably the greatest credit-driven bubble in human history. There will be those who will argue the stars are aligned for Niesko, and I hope they are right, but right now I would think Niseko property is for the wealthy, not the keen skier who is looking to fund their vacation and make a buk at the same time.

Link to post
Share on other sites
Originally Posted By: Go Native
Mr Wiggles I like to look at a resort like Whistler as a good example of a successful international ski resort. The property market there has gone through major ups and downs over the last 20 or so years but like most property markets the next up was always more than the previous one. No property market in the world just goes endlessly up without there ever being a period where growth declines momentarily or stagnates for awhile. Certainly if you bought a new property in Niseko currently you would not expect rapid capital growth in the next few years like there was over the last few years. Longer term though I see no reason why demand will not grow again and prices rise once more. Any investment is a risk, some get in at the right time and some encouraged by the 'hype' often get in late in the cycle and can be caught out if they were looking for a quick turnaround profit on their investment. That doesn't mean it's a really bad time to be buying in the area. As long as you have a longer term outlook then with some of the resale bargains going at the moment you could still do very well out of purchasing now. Unlike most property investment in Japan it's not the rental return you worry about it's the potential capital returns where the real profit is made.


No disrespect, but you say that you can "see no reason why demand will not grow again and prices rise once more." Wouldn't you agree that any investor worth his salt would also asked the opposite question: "What is the risk involved with prices not growing and prices not rising?" That's the question that usually trips up the property salespeople and estate agents.
Link to post
Share on other sites

In the US after their 'credit-driven bubble' as you put it, plenty of people have swooped in to pick up bargains in the aftermath. Some of that has been occurring here too (although prices haven't dropped all that much). Obviously if you believe, as I do, that prices will eventually go up again then this may not be a bad strategy. The risk involved in investing in Niseko currently really depends on the individual investor.

There's no reason in my mind to think that prices won't increase once again here. It's doubtful we'll ever see the heady days of prices near doubling each year again but I can't see any reason why more modest growth could not be expected. Bookings are through the roof compared to last year and from questions I receive almost daily I'd say investor interest is growing once again as well.

Tripitaka in the initial 3-4 years most of the investment and development here certainly was driven by the Aussie market. In the last couple of years though as prices got much higher investment really started coming mostly from Asia. And I suspect much of the furture investment here will be driven from this market. It's not a market short on cash.

Link to post
Share on other sites
Originally Posted By: Go Native
In the US after their 'credit-driven bubble' as you put it, plenty of people have swooped in to pick up bargains in the aftermath. Some of that has been occurring here too (although prices haven't dropped all that much). Obviously if you believe, as I do, that prices will eventually go up again then this may not be a bad strategy. The risk involved in investing in Niseko currently really depends on the individual investor.
There's no reason in my mind to think that prices won't increase once again here. It's doubtful we'll ever see the heady days of prices near doubling each year again but I can't see any reason why more modest growth could not be expected. Bookings are through the roof compared to last year and from questions I receive almost daily I'd say investor interest is growing once again as well.
Tripitaka in the initial 3-4 years most of the investment and development here certainly was driven by the Aussie market. In the last couple of years though as prices got much higher investment really started coming mostly from Asia. And I suspect much of the furture investment here will be driven from this market. It's not a market short on cash.


GN, I think that it is a generally accepted fact that the global property bubble was driven by excess liquidity and easy access to credit. As you say, prices doubled but productivity and incomes didn't double so if you think about it logically...

Everything else you say I agree with, particularly with regards to investment being an individual decision and Asia having the best potential for future investment.
Link to post
Share on other sites
Originally Posted By: Go Native
In the US after their 'credit-driven bubble' as you put it, plenty of people have swooped in to pick up bargains in the aftermath [...] if you believe, as I do, that prices will eventually go up again then this may not be a bad strategy.

But how long is eventually? In the UK if you bought at the peak of the 1980s housing bubble, you'd have to wait 13 years for your investment to be worth as much as you paid for it. Another peak 18 years later (2007) and another crash, which still hasn't bottomed out. Worth noting prices carried on dropping for 7 years after the 1989 peak.
Link to post
Share on other sites

×
×
  • Create New...