NISEKO - is it true the new mayor is Australian

[thursday 1]

There's only a huge Prince hotel at Higashiyama, the last I heard the Prince Hotel empire was Japanese owned and run.

 

ASB, the Niseko people would love you. You're just what they're looking for. You should head over to Hanazono where they are building little Melbourne in Niseko. Lots and lots of new developments there waiting to be sucke(re)d up.

 

For all the developments going on, it's damn medieval to not have an ATM in the entire village. The nearest one is in Kutchan.

 

Many people reading this site will believe AUDs are accepted at Niseko and wouldn't bother changing to Yen.

[montoya 0]

more news about the building boom up there. article mentions the higher end units going for $750,000AUD, which translates into $579,074 USD. looks like there are alot of very moneyed-type aussie skiers out there.

 

http://www.theaustralian.news.com.au/story/0,20867,20684139-25658,00.html

 

 

Hutchinson skis in for Japan project

Maurice Dunlevy

02nov06

 

QUEENSLAND construction company Hutchinson Builders will develop two luxury apartments blocks with a combined value of $35 million in Japan's emerging alpine sports capital, Niseko.

 

Chairman Scott Hutchinson said yesterday the company had acquired two prime sites for a total of $4million in the upper village at Niseko on the island of Hokkaido, Japan's northernmost island.

 

The company joins a procession of Australian builders, architects, developers and tour operators active in Niseko, following explosive growth in Australian, Asian and European visitor numbers to the town during the past five years.

 

One of the sites has been bought from SkiJapan for $2.5million. The 1500sqm property will be developed as a seven-level building with 33 apartments designed by Brisbane-based Cottee Parker Architects. Prices for one, two and three-bedroom apartments are likely to range from $390,000 to $750,000.

 

The second site of 1300sqm has been bought from a local owner for $1.5 million. Cottee Parker will design 31 one and two-bedroom apartments likely to cost between $290,000 and $460,000.

 

Former PRDnationwide project marketer David Tarantini will head the sale of the apartments, which should be on the market by this Christmas.

[thursday 1]

it must've been this place

 

Sale price:

 

113,100,000 yen

 

Details:

Address: XXXXXXXXXXXXXXXXXXX

Land: 377 tsubo (1245 sq metres)

Tsubo price: 300,000 yen

Boundary dimensions:

 

 

Others:

- Prime location

- Located on main road route 343

- Triangle shaped block

- Yotei views

 

Access:

Shuttle bus: Immediate

Walk to lifts: 5 minutes

 

Status:

Sold

 

 

Now, 31 apartments at average price of AU$375,000. And they'd have no problems selling them. Nice little earner.

 

Edited out the address.

[NoFakie 45]

$579,074 USD for less than 1/33 of something built on less than 500 tsubo? 30mill USD for two apartment blocks on 900 tsubo? Madness!

 

Not that that means people won't buy them, of course.

 

Hokkaido locals must be looking on in amazement.

[mattlucas 0]

 Quote:

Originally posted by thursday:
Many people reading this site will see that AUDs are accepted at Niseko and won't bother changing to Yen.

All Aussies going to Niseko

Don't bother changing your money into Yen

ALL shops, hotels and ticket offices accept Aussie cash

[ausi ski bum 1]

I have been to Japan before and Know that I need to carry cash, believe it or not us Aussies are very well informed how to make the best out of our holiday.

 

I am looking forward to touring after my skiing taking in Tokyo, Takatam, Nara, Kyoto, Hiroshima and finaly Miyajima Island. The JR Pass makes this very economical touring.

[Fattwins 0]

Wow more apartments a little bubble over there you can buy 4 times the size for half the amount of money in other places though.

[damian 0]

Its the now failing Aussie property hysteria flowing over into a new location.

 

God damn, some people up there are going to get hurt. Greed + Ignorance + Hope = just enough winners to make everyone believe that no one ever loses. Its a bubble.

 

 

The property boasts:

 

 Quote:

Prime location

- Located on main road route 343

- Triangle shaped block

- Yotei views

Doesn't it have a view of the actual Niseko ski hill (literally). Or isn't that seen as an attribute?

 

 

Getting mails from my mates in Melbourne and it is big time "I've been to Bali too" except now "I've been to Niseko, too". (the meaning behind those words wont mean much to many people). Its a song by long since gone Australian band. My dad took me to see Redgum live when I was no older than 15 or so.

 

Redgum were an Australian folk and political music group. They are most famous for their protest songs exploring the impact of war ("I Was Only 19") and Australian consumer influences on surrounding nations ("I've Been To Bali Too")

 

 

 Quote:

Qantas flight 20, Denpasar, meals and accom', rent-a-car

I've been to Bali, I've been to Bali too

 

Took a two week course at a suntan clinic

So lying round legian and I wouldn't look anaemic

And you can't impress me, 'cause I've been to Bali too

 

Got a ride out to Kuta in the back of a truck

Cost me twenty dollars and it wasn't worth a buck

Hustled to a losman down Poppies Lane

By a Javanese guy in a tropical rainstorm

Lock up your daughters, I've been to Bali too

 

Life is tragic hanging out at Kuta

If you haven't got a car, a bike or a scooter

Show me the bike shop, I've been to Bali too

 

Got myself a Honda, had to get away

No brakes, bald tyres, five thousand rupes a day

I've been to Bali too.

 

Well I don't ride a bike much home in Australia

As a motorcycle hero guess I'm a failure

Bemos to the left, trucks to the right

The Honda was a wreck but I was alright

Hello mecurochrome, I've been to Bali too

 

Wired home for money, short of cash

A dose of Bali belly and a tropical rash

Daddy came through - American Express

Bali t-shirts, magic mushrooms, Redgum bootlegs

I've been to Bali too

 

Took my bag and mozzie coils to Peliatan

It's there were my Bali trip really began

Been there, done that, I've been to Bali too

 

Tourists from Holland, Britain and France

Late night puppet shows, leg on dance

Want to see my slides, I've been to Bali too

 

Well I wandered off to Ubud, just a little up the track

One week there didn't want to come back

Listening to Gamelon playing guitar

Janteris, tacos, Hotel Monara, two month visa

I've been to Bali too.

 

Flying Kangaroo out of Denpasser, left

[montoya 0]

I'm still surprised the resorts in the Niseko area haven't jacked up their ticket-prices (--or have they?)

[Rag-Doll 0]

Redgum? Spud I always figured you for a closet commie! Top band though. I'm showing my age but they really had something to say and said it well. Their album Caught In The Act was my favorite.

 

Rob Hirst made the point only recently that protest rock doesn't seem to get a lot of air play these days.... kids these days, I don't know.

 

I think I once heard that John Schurman was doing children's daytime television - I guess a guy has gotta eat.

 

I'm amazed that so many people and developers are still going into Niseko. Surely it has reached its peak prices. 240 tsubo blocks in the upper village were being sold about 3 years ago for 80,000 per tsubo and that was a big mark up on where the price had been a year or two before.

[thursday 1]

RD,

Rags to more riches. Maybe time for a portfolio re-positioning. Like make hay.

[Rag-Doll 0]

Mate if you mean sell, I reckon you're right. The horse has well and truly bolted for buying Niseko investments now. What has blown me away and I guess it is just my own naivety that I didn't see it coming, was the speed at which the property market has changed from what was 3 years ago quite small and mainly run by long term/full time residents, into the monster it is now. The number of apartments is increasing exponentially and I reckon the supply will exceed the demand by a long margin before the market can adjust. How this will impact on the town I can’t imagine but two results do spring to mind - 1) investment returns, both rental and capital, will suffer and 2) declining rental rates for new western style places will draw people away from the local (Japanese style) accommodation which probably tend to be older and may be less appealing to the gaijin hordes.

[damian 0]

Back then I didn't understand what the labels 'folk band' nor 'political statement' where. But I recognised two of their bigger hits as being more than songs. They certainly wrote one of the best post Vietnam songs I know, it suited very well Australia's own experience of the war (not that I am a compendium of Vietnam music, mind you).

 

They played in our small shitty town at the Civic Centre, we were in the alcohol free seated section and I was standing on the seat. My best mate was there with his mum as well.

 

Anyway, Niseko is a precarious bubble that's still inflating on emotion rather than value. So some will decide that riding the bubble whilst it grows is worth while, just get out in time, eh? All it takes is one damp season and Qantas to cut back on direct flights and things instantly change. Lets not rule out changes in foreign ownership laws, taxation or FX volatility. If ever there was the potential for horrendously illiquid assets to develop over night, its the Niseko holiday apartment market.

 

Is 'Niseko Rules' the person formally called Lin?

[Rag-Doll 0]

Some mates and I are doing a farewell visit this Jan. I'd actually rather be showing them the joys of Hakuba but it's just easier to return to Niseko at this stage. I was up there in March this year with the mountain pretty well empty, I'm dreading a peak season experience.

[lin 0]

Not me... I'm still lin!

 

And I do like Niseko.

[snosurf 0]

When you ride niseko everyday for a month, you get to know certain areas where even the most hardy of aussie infiltrators can't find! While they're not super steep runs, they're bloody good gun!

 

For that reason, i'll go back to Niseko. I'll laugh at the drunken antics of rowdy revellers. And i'll quoff at their naive cultural perspectives. But not this season....

[snosurf 0]

typo *bloody good fun (not gun)... I'm not that crazy

[js 0]

Mr Sebago could be correct about the bubble, but it could also reflect Queenstown (NZ).

 

Saw a documentary some months ago - lots of cashed-up baby-boomers from England, Canada, etc are buying up the town (becoming both permanent residents and landlords), raising land prices to the extent that the locals can't afford to reside there, commuting to jobs in the service industries.

 

I bet the locals around Niseko didn't reckon on that scenario - except the politicians and other predatory weasels.

 

Also, there's a long history of BrisVegas having shops that 'only' sell to Japanese tourists (Yen), so I guess the same deal in Niseko is fair enough.

 

(Here's an easy one for ya: Rip Rip Woodchip - name the artist.)

[damian 0]

I don't think a shop in Oz or Japan can sell only to a certain nationality and accept only a foreign currency. Although I am sure plenty do go out of their way to favour a certain bias.

 

Who is Mr Sebago?

 

I have been thinking over a property purchase in NZ (South Island, west coast) for a long time. Might even buy a few Merino sheep. When I was young I clipped, spun and partially knitted my own jumper from my own sheep. I can't see it in my near future though.

 

- John Williamson, he's almost too 'True Blue' for me . Nah, joking, he writes some good honest Australian folk songs.

 

Rip rip woodchip - turn it into paper

Throw it in the bin, no news today

Nightmare, dreaming - can't you hear the screaming?

Chainsaw, eyesore - more decay

 

 

Snosurf:

 

>When you ride niseko everyday for a month, you get to know certain areas where even the most hardy of aussie infiltrators can't find

 

Mate, thats such an Aussie thing to say And, well, it makes Niseko sound like the Kuta of Bali. And makes Hokkaido sound like the Bali of Indo.

[NoFakie 45]

 Quote:

Originally posted by SubZero:
Saw a documentary some months ago - lots of cashed-up baby-boomers from England, Canada, etc are buying up the town (becoming both permanent residents and landlords), raising land prices to the extent that the locals can't afford to reside there, commuting to jobs in the service industries.

I bet the locals around Niseko didn't reckon on that scenario - except the politicians and other predatory weasels.

I understand why you make the comparison but it has major problems. Traditionally very few people will have lived at the Niseko part of Kutchan. It will be mainly outsiders who came to start tourism-related businesses. They'll have bought from the original owners when skiing took off among Japanese and some will no doubt have been going bankrupt due to falling numbers when the Aussies started coming. Now foreigners are buying from them, or from the original owners if anything is left from the first time. The booms in London, Sydney, etc. stretch way out in every habitable direction and are unavoidable for the millions that are working there. By contrast, Niseko is a tiny area in Kutchan, with very little work most of the year anyway. 10 minutes (?) down the road it will be back to ordinary Hokkaido countryside. According to the Asahi, the old commercial part of Kutchan saw the fourth largest drop in property values in Hokkaido last year. Niseko is just a microboom.

http://www.asahi.com/housing/zasshi/TKY200610050230.html

[Fattwins 0]

so here you go do you invest in the 400000 dollar porperty in Niseko or the 200000 dollar one just down the road, and buy a car?

 

I dont think Niseko will bust yet! but i sure hope that there is a plan. investors building with no plan or control checks, leads to too many buildings.

 

The false marketing will now only get worse though

[damian 0]

Who knows when it will bust, thats just the thing with bubbles. There are some signs people rely on, a bit on that below.

 

But before that, a comment on what MrW raised: the mico nature of the bubble. There is no natural organic demand for these assets. The investors and speculators and the people providing income on the investments and performance on the speculations are all from a specific segment. Unlike Sydney and London etc people don't need to live in Niseko. Very few people need a property there. So in the absence of rents and asset income from holiday makers, there is little underlying value to the asset, even if it is within spitting distance of a ski lift. Sure, having a place near a resort is nice, but that’s not an investment, it’s a luxury item. If that’s all you want, why buy in Niseko? The reason is that it isn’t all people want. People want to make income and capital gain from a bet. And when betters and investors decide to stop playing for a while (which they will) who will buy your asset when you want out? The long term Kuchan resident obachan wont, certainly not at the price most foreign investors paid for it one season earlier. Even in derivatives markets you have moments of near total illiquidity, but there are always organic natural participant who need to transact sooner or later, they are called hedgers and they sell risk to speculators even when speculators loose interest in taking the other side of another speculators bet (and even with them you can lose all you have very quickly if you don’t bet size correctly). The Niseko property market doesn’t even have that core body of natural participants. In the absence of hype there is very little supporting this micro bubble other than more hype, and free booze marketing stunts in Hong Kong. When speculative participants are the vastly dominant players then you get a bubble that simply can’t last.

 

 

Signs that a bubble is ripening:

 

1. It hits mainstream press as a boom, dumb money (a horrible term) starts to enter. Take the sugar bubble as an example: most people only got excited by that in the months leading into the pop, when most of the trend had run its course. Dumb money enters tha game and they are buying from smart money sellers. Nothing wrong with buying strength and selling after more strength, its part of what is called trend following. But the risks here are sudden illiquidity and betting the farm. Being wrong must be incidental to your financial well-being. This is essentially bet sizing and its very hard to do properly on real-estate bets.

 

2. Cranks, crooks, spivs and cheesy marketers enter the game and try to leverage off the flow of cash in a mania environment. They are attracted to where the action is. This leads to the next signal

 

3. Instances of criminal activity, fraud and the general shafting of otherwise well intention 'dumb money' investors in point 1.

 

4. Price volatility expands. You get ridiculous prices being paid for assets that just a short time ago were only slightly over priced. Thats people panicking and buying at any cost because they just cant miss out. And they are usually the very last buyers in a bubble. After that there isn’t another buyer. What happens then? Prices stop rising and when you have no organic demand and speculators playing against other speculators, they all want out.

 

Pop.

 

All this might be seasons away. Its not a doomsday prediction by any measure. But for fun, and on the flight to Niseko this season, try reading this double volume book:

 

Extraordinary Popular Delusions and the Madness of Crowds and Confusion De Confusiones

[Rag-Doll 0]

Spud,

 

That is a particularly astute post and I do think some of those conditions already exist in Niseko. The one point that I would differ on is the inherent value of property in holiday resorts generally. True, there will be investors looking to turn a profit and those people in that category who have over extended themselves to buy into the Niseko market are terribly vulnerable to the changes you've outlined early. However, there is also a category of long term investor who simply buy for the intangible benefit of having a holiday house in a favorite holiday destination – it was a major motivation for our investment syndicate, we bought the apartment to use it and if it paid for itself then all the better. We’re getting out partly because we have enjoyed a significant capital gain but largely because now that only 1 in 5 of us live in Japan, it is not all that convenient or cost effective to use it. Traveling independently to Niseko, even when using one’s own accommodation, can actually cost more than some of the package tours from Australia (where we'll all end up sooner or later) on offer. If it wasn’t for the opportunity to realize a good return on our investment we would probably keep the apartment. Apart from the practical benefits of owning the place, the knowledge that we own a holiday place in the snow in Japan (and mentioning causally in conversations) provides enormous personal satisfaction – I know that probably sounds very conceited, but it’s true.

 

Irrespective of the vagaries of global economics, I think there is still enough wealth both in Australia and in the immediate Asian region to maintain some liquidity in the Niseko market. Whilst in the Japanese property sense what is happening in Niseko is definitely a mini property bubble, it is only one example of many holiday destinations currently booming in and around Asia. Southern Thailand and other places in SE Asia are experiencing similar property booms. The depth of the holiday property market accross the region suggests that the Niseko experience isn't quite a vulnerable to minor changes in Australia as it would seem when viewed in isolation.

 

My principal concern about the trip in Jan is not so much the Aussie contingent, but simply the numbers of over all bodies on the mountain. The relatively uncrowded slopes and lifts is one of the great pleasures of snowboarding in Japan – no one likes having to wait in lift lines when the snow is good. I’m also a little bored with Niseko and would rather explore some of the resorts in Hakuba – they can’t all be a bad as Happo

[thursday 1]

ASB, meet RD.

RD has a property he'd like to show you.

RD, ASB is a holiday home investor who revived this thread. .

 

Basically at the prices in Montoya's article you have to be some kinda nutjob to fall for it.

 

Nice read.

[thursday 1]

Incidentally, RD,

I was there last Christmas and CNY and there were hardly any queues. But this coming season it will be a very different story as I've asked around and most of the oz places are fully booked from Christmas to CNY. But as always I'll be staying in a Japanese place.

 

Incidentally there will be direct flights from HK to Nagano soon.