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Originally Posted By: Go Native
Not really, the bulk of the investors over the last 12-24 months have been from SE Asia not Aus.


Really ?? I live in Singapore and have met plenty of people that own places in Niseko. All expats (mostly Aussie) and not one Singaporean. Is it mostly expats buying ?
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There's plenty of expats as well and not just Aussies. Actually quite a few of the houses I know of sold this winter to SE Asians will not actually be put into the rental pool, they are purely holiday homes and many of them will be spending more time in them in summer than winter.

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I don't know about Niseko, but some of the property prices (commercial/private) being asked for in Hakuba seem way out of line to what they're worth. From what I can see, most of the demand is from Australians, who seem to live in another universe on the issue of assessing property value.

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Property value is purely and simply what people are prepared to pay. Aussies though certainly have a very different perception about property as an invesment to what seems normal in Japan.

 

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Originally Posted By: Go Native
Property value is purely and simply what people are prepared to pay. Aussies though certainly have a very different perception about property as an invesment to what seems normal in Japan.


Ahh.... yeah. While I admire your free market philosophy, property valuation is much more than what "people are prepared to pay," particularly as a smart investment. However, I agree with you that the Australian obsession with property as an investment is completely different from what is normal in Japan. I think it's fair to say that if we remove the Aussies from the equation, then the Niseko boom would have been mild at best.
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hmmm... trip I think it is more appropriate to say that the general Japanese Property Market does not work in the same way as that in Australia or other Western countries.

 

Your statement about 'Aussie obsession with property investment.." reads very much like it is some strange aberration that Australian's buy and sell property and the price often (over the long term almost always) goes up. But it is not unusual in the world. People buy and sell and invest and own investment rentals in many many countries of the world.

 

And if you look at ski resorts - it is the norm that people buy a property and expect that over time the property will appreciate in value, whilst the owner generates an income from its rental and perhaps even dabbles in some personal enjoyment. Whether that is Whistler, Vail, Zermatt, Cervinia, Thredbo or Niseko.

 

Periods of rapid growth can sometimes bring rapid profits, but the reality is markets tend to adjust - there will often be a flat or a fall before the next growth period. But over time they SHOULD appreciate.

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Originally Posted By: Mamabear
But over time they SHOULD appreciate.


Why ? If there is less demand than supply, prices will not appreciate and probably go down. Australia has had a lot of population growth and recent years, a great economy, historicaly low interest rates and high credit availability. That is why prices have done well in Australia and a lot of those same things have obviously had an impact on Niseko.

If those things were to all reverse, I suspect prices will go down. I doubt prices ever got back to their historical highs (in real terms) in the spice islands, Great Zimbabwe, Tenochitlan, Babylon, Athens or Rome.

Sounds silly doesn't it ? My point is there is no mathematical constant that says prices WILL always appreciate.

Think about this the next time the @rse falls out of the market, which it will.

(MB - this is not a direct dig at you - just at those general sentiments that many hold - prices always go up)
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In Australia, historically prices have always gone up even if there has been a period of stagnant or negative growth. The next peak has always been more than the previous one.

People should really understand though that the property market here is no longer the sole domain of the Aussies. As I said earlier most of the recent sales are to SE Asians who still seem to be extremely cashed up. Hanazono and Niseko Village have recently both been sold to large SE Asian companies. Australians had their little dabble in real estate here but now the big boys from Asia are really moving in.

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But but but but...

 

barring invasion, plague, revolution, complete financial devastation ...or other such scourge...

 

There is a little thing called inflation. If prices of property do no increase then they are actually LOSING value in relation to their worth and the worth of what you could buy if the asset was liquidated.

 

I know it has happened elsewhere in the world, and my own home washed off half a mill in value in the fall out from the GFC - but it WAS about that much overheated. Those big jumps in value are not realistically sustainable gains, sometimes they wash off quickly (in a loss of value) and sometimes slowly (with a decline in the rate of growth compared to inflation).

 

And you raise a good point about supply and demand.

Lots of things can influence both supply and demand.

In WA we have too much government intervention on land releases which creates an artificial undersupply of housing particularly at the lower end of the market effecting first home buyers and renters. Being inner suburbs close to the city we re less effected by that.

 

In Niseko demand will come from people wanting a piece of THAT! What will happen with all the new development going on a bit further out - I don't know. Will you run out of people wanting to buy? or will it just mean that the area is more vibrant and flush with cash and able to add more features/services and attractions....

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