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I see no reason currently why prices would plummet much lower. If anything demand for property is starting to rise again as the Asian market is starting to discover Niseko and for them prices here are still very affordable. I don't think we'll see a lot of major new construction this summer which frankly isn't a bad thing, although I do know of a couple of medium sized projects that were put on hold when the GFC hit and have now sold enough to go ahead. There's also quite a few new houses going up, many of which will be holiday houses rather than in the rental pool. Prices certainly won't be going up at a rapid rate for a while though I wouldn't think.

 

And yes stemik making Niseko into more of a year round destination is something all businesses here want to see happen. We are all doing a fair amount to try and make it happen. Early bookings for summer are already well above what we had targeted for at this time and we're hopeful that we can have really significant growth from last year. We've been working closely with some major Japanese travel agents to get our product in their brochures and have a big presence on some of the most popular travel websites. The SE Asian market coming to Hokkaido is currently much bigger in summer than in winter but as yet not a whole lot come to Niseko. We are working closely with a lot of travel agents in Asia as well to hopefully turn this around.

 

A lot of people I think, including many Japanese, thought we all just came here to make a quick buck and then would leave when the bubble 'burst'. Well I think we've shown that isn't the case. Most foreign owned businesses here are in it for the long haul as far as I can tell. As I said earlier I think we now have most of the accomm options of a major international resort covered (except maybe a true 5* hotel), we now need to expand on the other services and retail options you'd find at other successful resorts to really start bringing this place up to an international standard. And of course start implementing the Master Plan to make it a more scenic and user friendly village. The redevelopment of this resort has only just begun in my opinion.

 

The Aussie market and investment helped get this place on the international map but I think it's now the Asian market and investors which are really going to take it to the next level. The Asian market dwarfs the Aussie one and the money there makes even the wealthiest Aussies look like paupers!

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I've not been paying big attention, but the first apartments built in Niseko that were listed on here had tag lines of 8% returns. Some even guaranteed it for two or three years. More recent places like the Vale are only saying up to 4% with no guarantee. Its a big drop. Up to 4% for big forex exposure is very poor.

 

With all the talk about "potential", it is inevitable that people will be buying out of speculation of capital gain, not out of return. Return is the sustainable way to value real estate, not the "this is how much the greater fool will pay". Sure people have made capital gains in the past, but you can say that about any asset class at certain times. Gold has gone up four times during the Niseko boom. Unlike property in Japan, you can buy and sell gold without a massive capital gains tax or 3% commission at both ends.

 

I don't know about Niseko, but I think Australian property will definitely fall. The debt level and income-to-price multiplier are just crazy!

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Originally Posted By: Go Native
I see no reason currently why prices would plummet much lower. If anything demand for property is starting to rise again as the Asian market is starting to discover Niseko and for them prices here are still very affordable. I don't think we'll see a lot of major new construction this summer which frankly isn't a bad thing, although I do know of a couple of medium sized projects that were put on hold when the GFC hit and have now sold enough to go ahead. There's also quite a few new houses going up, many of which will be holiday houses rather than in the rental pool. Prices certainly won't be going up at a rapid rate for a while though I wouldn't think.

And yes stemik making Niseko into more of a year round destination is something all businesses here want to see happen. We are all doing a fair amount to try and make it happen. Early bookings for summer are already well above what we had targeted for at this time and we're hopeful that we can have really significant growth from last year. We've been working closely with some major Japanese travel agents to get our product in their brochures and have a big presence on some of the most popular travel websites. The SE Asian market coming to Hokkaido is currently much bigger in summer than in winter but as yet not a whole lot come to Niseko. We are working closely with a lot of travel agents in Asia as well to hopefully turn this around.

A lot of people I think, including many Japanese, thought we all just came here to make a quick buck and then would leave when the bubble 'burst'. Well I think we've shown that isn't the case. Most foreign owned businesses here are in it for the long haul as far as I can tell. As I said earlier I think we now have most of the accomm options of a major international resort covered (except maybe a true 5* hotel), we now need to expand on the other services and retail options you'd find at other successful resorts to really start bringing this place up to an international standard. And of course start implementing the Master Plan to make it a more scenic and user friendly village. The redevelopment of this resort has only just begun in my opinion.

The Aussie market and investment helped get this place on the international map but I think it's now the Asian market and investors which are really going to take it to the next level. The Asian market dwarfs the Aussie one and the money there makes even the wealthiest Aussies look like paupers!


Marketing the off season hard to the Asian market is all good and well, but shouldn't their priorities be with the Japanese market?
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We've been working closely with some major Japanese travel agents to get our product in their brochures and have a big presence on some of the most popular travel websites


Um....we are trying hard on the Japanese market as well as I said above. It goes beyond just the above as well, we've had talks about the region with JNTO officials and government ministers about focusing on Niseko and marketing this region more.
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The Japanese market is without doubt our biggest priority through the warmer months. The SE Asian market though is also very important as it has huge gorwth potential. For a lot of us on here we may have the impression that everyone has already heard of and knows about Niseko. Earlier last year we hosted a night in Hong Kong for a whole heap of travel agents and hardly one of them knew anything about Niseko. Many had never heard of it before. We've only barely scratched the surface of tapping into that market.

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Is there proper mountain bike trails GN? I'd guess that the summer months would appeal to the Japanese market, being able to escape the humidity of down sarf but still be in Japan, getting to enjoy the same food that Japanese seem to miss after 5 mins out of Narita!! lol

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Yep there are proper mt bike trails now and in September we have the Niseko Cycle Week which has a whole lot of cycling events including mt biking, road racing and plenty of fun family events. It's growing in popularity each year.

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Spot on GN.

 

Couple of points to add to the mix.

 

If you've ever spent time in western US and Canadian resports that are 10+ years post accelerated growth it is very difficult to find people who are orinially from 'there', wherever 'there' may be.

 

And the successful N American resorts cater to three main markets:

 

domestic close by, eg Vancouver to Whistler

international 7-day minimum

home owners who don't put their properties in the pool

 

If Niseko gets the Sapporo crowd, then it's well on the way to "surviving"

 

And having just returned from a very enjoyable 4-day trip to Bavaria where they were getting excited about a 2m base and 10 cm in the village overnight, the Niseko Resort Area will continue to succeed because of mother nature

 

SNOW, quality and quantity and not just for the powder hounds. Good groomed terrain comes from good snow (and people who know how to groom wink )

 

And wonderful, low humidity summers for the domestic and SE Asian market.

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Originally Posted By: Go Native
Quote:
We've been working closely with some major Japanese travel agents to get our product in their brochures and have a big presence on some of the most popular travel websites


Um....we are trying hard on the Japanese market as well as I said above. It goes beyond just the above as well, we've had talks about the region with JNTO officials and government ministers about focusing on Niseko and marketing this region more.


When it comes to marketing and promotion, Japanese officialdom is completely lost. Just today, I ventured into downtown Osaka where I saw thousands of Chinese package tourists milling around, while a flotilla of ultra-right wing knuckle-heads paraded down the main road berating Korea and China (or whatever BS was oh the menu for the day). All it will take is one Chinese newspaper to pick up on this and the economic benefit will be lost. It would probably comes a surprise to the officials that this might even be a problem.
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Originally Posted By: Nisoko
Well put Mike.

So how is the skiing in Bavaria then?


I was in Balderschwang some years ago. A smaller resort and quite nice. Nothing agains Bavaria, but next time I would rather go to bigger resorts in Austria.

Back to topic, I just had a flier in my letterbox for a development in Niseko, Capella Niseko, no prices on it. I guess too risky.
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Originally Posted By: Kraut_in_HongKong
Originally Posted By: Nisoko
Well put Mike.

So how is the skiing in Bavaria then?


I was in Balderschwang some years ago. A smaller resort and quite nice. Nothing agains Bavaria, but next time I would rather go to bigger resorts in Austria.

Back to topic, I just had a flier in my letterbox for a development in Niseko, Capella Niseko, no prices on it. I guess too risky.


British half-term week. Didn't want the zoo that AT and Fr would have been.
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capella niseko starting prices at $1m for an appartment and $4m for a townhouse. targeting the s.e. asian summer visitor and japanese wedding market. IMO wrong price if you consider how much you could probably buy a resort land/lifts etc for these days. but i am not their target market, or have been successful enough to have that kind of money lying around for such low yielding investments!

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Capella is an interesting development if it all goes ahead. It is situated out near the Annupuri ski area and will offer a fairly self-contained resort experience. Definitely priced above the average investor. As I said previously the money in Asia is absolutely crazy.

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It is a bit out of the way isn't it?

I was wondering about their plans for getting on-piste... shuttles to all local area's or are they going to install a Gondola from Capella to Annupuri or will all those poor wealthy people be trudging alongside the road?

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I got lazy and haven't really read the thread... but Japanese property market is usually fairly low key because of its taxation. The capital gain from property is taxed quite heavily in Japan (to the point that most people cannot afford to buy property of the same level after they sell their old property). The only real investment you can do, in my opinion, is long term development etc. The domestic market is also really conservative in regards to property/housing (just to name a few). I'm curious to see how Niseko pans out; personally, I wouldn't mind building a chalet somewhere.

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Thanks for the feedback. Capella certainly looks nice from the leaflet pix. $1m is even not really expensive for an apartment here in Hong Kong.

 

I wonder what the ROI is? I guess your apartment can be let when vacant and the management company takes care of everything (incl. a nice slice from whatever money comes in).

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Management company margins here are actually pretty slim. Although the normal take from a booking is 35% of retail revenue if the booking is through a wholesale travel agent they get 20% leaving the manager with only 15%. Obviously with direct bookings the manager gets to keep the whole 35%. Because we are dealing with a foreign market in Japan though it takes quite a lot of staff to assist with all the services they require. Plus the costs of keeping a front desk and year round staff means most management companies aren't exactly rolling in it.

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