Opinions on Japanese ski property

[holo 0]

Afternoon all,

 

I was just after your opinions if I may on the Japanese property market.

 

My wife and I have long been interested in purchasing an overseas ski property, primarily for our own use, however with the possibility of renting it out as well where possible.

 

We have looked in Europe and North America but for various reasons, cost and distance being 2 of the major ones, turned our search to Japan. Further research has led us to Hakuba. We like the variety of terrain, the fact it is underdeveloped currently compared to some and of course the snow record. Also we have followed with interest the stories of some of you Hukuba locals, both the existing and recent locals. Congrats again TJ

 

However, despite all the positives there remain some undeniable negatives. These include some unusual principals for this Gaijin. For example, the fact that a property devalues like a car, and perhaps over 30 to 40 years all you have left is the land value. (does this mean buying land and building is a better option ?)The fact the population is aging and declining is also a worry.

 

We don't need to continually rent a property out (although extra income is always welcome) however nor do we necessarily want to spend money on something that will depreciate to very little.

 

I would be grateful for any thoughts you may have.

 

Thanks

[Goemon 0]

Not an answer to your question, but just saw this article on land prices in Japan .

 

Not surprisingly:

 Quote:

Land prices in the town of Kutchan in Hokkaido marked the sharpest margin increase for residential areas, at 33.3 percent. Famous for its ski resort, in recent years Kutchan has been attracting a growing number of foreign tourists and entrepreneurs.

[thursday 1]

there you have it. Niseko is over cooked. Obviously need to look elsewhere.

[Fattwins 0]

devalue i dont know about that. Japan is starting to come out of the devaluing cycle really but it wont boom like NA for quite sometime. The prices right now in inaka (out of the cities) in Japan is pretty much at the bottom. Its not a bad buy its not a bad risk at the cost. Its the people that bought the sae homes years ago and took out a half a mill to a million in loans that are in trouble.

[Rag-Doll 0]

Holo,

 

Google hakuba real estate, hakuba property and stuff like that. There are people on the ground in Hakuba already offering all sorts of help and advice on this stuff. Hakuba is an appealing prospect and some friends and I have been looking at investing there as well. If most of us were still living in Japan we might have already committed ourselves.

 

A couple of personal views/experiences:

 

a. The domestic Japanese ski industry has been in decline for years and even with the end of the recession that situation is unlikely to change. Usage and client demographics needs a long and detailed answer, you say that you’re not that fussed about rental income, but if you do rent and you probably ought be considering this if you’re looking to offset depreciation on the building with something more than just capital growth, your main customers will be foreigners in the winter (mainly from O/S and looking for 2-3 bed rooms for group bookings) with a significant local market during the summer (looking for 1-2 bed room apartments for Japanese size families). A Hakuba property might also attract Japan resident foreigners to a greater degree than Niseko. Niseko is a different market, but there are some parallels. Location and type of building will therefore be important. This in turn will impact on whether you buy an existing building or buy vacant land and build your own. It seems that often there isn't a lot of difference in price between vacant land and land with an existing building.

b. It's almost impossible for foreigners to borrow against the Japanese property - J banks don't lend to non-residents and Aust banks don't take security over Japanese property. Even if a buyer does find a bank to lend the money, Japan doesn't have the market valuation industry that, for example, Aust does has and so whilst a buyer might find a bank that will lend, say 80% of the valuation, the Japanese valuation will be more akin to the unimproved value of the land (sort of like the valuation used for council rates and stuff in Aust). This will mean a buyer needs to stump up 40, 50 or even 60% equity. The alternative is to fund the purchase with cash or borrow against assets from O/S – this acts as a major inhibitor on investment growth for these types of properties for the simple reason that it excludes all those people who don't have $250k - $500k to spend on a holiday house.

c. Hakuba (Narita airport > Narita Express > Tokyo Station > Nagano Shinkansen > Hakuba Bus) is not as easy to get to for O/S visitors as the Hokkaido resorts, for example, I understand that the last bus leaves Nagano at 7pm, which is too late if you’re arriving from Aust on a day flight so a visit to Hakuba will include a stop in Nagano or Tokyo - if nothing else, it just costs more to get to.

d. It’s early days for Hakuba’s development and whilst there are many good people in Hakuba who would be able to help with planning and development and management etc, they may (IMHO) not have quite the same level of experience or professionalism that other resort areas offer. A consideration when you’re looking at investing from offshore. If you’re not renting it may be less of an issue, but I reckon reliable property management in a high snowfall area would still be pretty important.

 

The general Japanese property market should not be regarded as being indicative of how an investment in an international ski resort will perform. The demographics of potential buyers of a property in a ski resort will be vastly different to the demographics of the usual purchasers of Japanese rural or semi-urban property. In my very limited (but optimistic) view, a change in bank lending policy, Hakuba’s international profile, Hakuba’s access or development plans (i.e. involvement from a major international developer) would improve property values significantly. Conversely, the decentralized nature of the Hukuba valley and its many open areas means that there may not be the shortage of land to drive prices up in the way, for example, the Upper Village in Hirafu has experienced.

 

I’m sure lots of people on here will have equally valid but opposite views on the above. Even if you don’t want to get into the Niseko market it is worth giving the real estate agents in Niseko a call (in addition to the Hakuba guys) and talking about buying land/investing in ski properties in Japan. They seem to have the view that the more the Japanese ski industry develops (even if it is not in Hirafu), the better it is for all concerned.

[Ocean11 0]

As for buildings depreciating, that's because they haven't been built to last. They're usually fairly horrible after 30 years.

 

These days, builders are talking about buildings that last at least 100 years. When they're built to last, they may stop depreciating (some properly built housing we looked at hadn't depreciated). Given the likely future of energy prices, if the property is built to be largely self-sufficient in energy, that might help it to maintain its value too.

 

Obviously there's a big question mark over this though...

[SnowConnection 0]

Most Japan TV news reported Kuchan land price increase in the morning. Most commentators are negative to the boom which would be one-time shot. Most referred to Yuzawa ski area where you can see many discounted rooms of condos built in Japan buble era in 1986 thru 1991. A differece is an Ausie investor(Hokkaido Tracks) to Japan investors.

Yahoo! Maps

Kuchan(=Niseko): http://map.yahoo.co.jp/pl?lat=42%2F53%2F...pointer=on&sc=8

Yuzawa : http://map.yahoo.co.jp/pl?lat=36%2F55%2F...pointer=on&sc=8

Hakuba : http://map.yahoo.co.jp/pl?lat=36%2F41%2F...pointer=on&sc=8

 

If you love snow quality, go to Niseko. If you love Onsen & rural, go to Yuzawa. If you love mountain landscape, go to Hakuba. Yuzawa is the nearest town to Tokyo among them.

[holo 0]

thanks for the info and links all. Especially thanks Rag-Doll for typing all that out, very useful points.

 

I will as you suggest contact a couple of the Niseko agents to get their thoughts as well.

 

Thanks for the links SnowConnection, let me just get my laptop to accept Japanese characters.

 

I appreciate everyones time in replying.

[thursday 1]

 Quote:

Originally posted by holo:
I will as you suggest contact a couple of the Niseko agents to get their thoughts as well.

Yes, get some unbiased views from them.

[holo 0]

 Quote:

Originally posted by thursday:

 Quote:

Originally posted by holo:
I will as you suggest contact a couple of the Niseko agents to get their thoughts as well.

Yes, get some unbiased views from them.

ooh, you cynic thursday, or is that realist

[chop 0]

Holo, my advice for buying property in Japan based on my experience over the last 4 years, Niseko(Kutchan) area- hope you are cashed up as it has lost control, in my veiw buy out of Hirafu , say 5-10 minutes out of town ,you will get value for moeny and still be close to the hill. When contacting real estates try the local Japanese people, there is still normal prices around- avoid Hirafu, its really starting to suck!

[TJ OZ 0]

My advice as a recent purchaser is to have some knowledge of construction or at least get some advice from someone who does. We were very lucky with our place (Concrete and steel) so as long as the foundations are right then not much else can go wrong. There are quite a few places around Hakuba that were built in the bubble era when they spent a lot of money building. Some of these places are derelict now and can be picked up for half of what the construction cost would be. If it is just a holiday place you are looking for then I don't think the market can drop any further and I know people are coming over there this winter to buy properties. I have been asked to keep my eyes open for properties as well. It all depends on what your main goal is. If you are buying solely for investment then it is speculative as with most investments there is no guarantee. There is a lack of accomodation homes in Hakuba so I would believe that renting it out would be quite easy. Make it close to the shuttle bus lines and restaurants/bars so overseas guests don't need to hire a car. Remember position position position.

[chop 0]

my honest thought is its all good either way, Niseko/Hakuba when you buy right!!! yep to the 3ps

[bushpig 0]

 Quote:

Originally posted by chop:
avoid Hirafu, its really starting to suck!

you referring to prices??

[chop 0]

probarly the thing that gets me is the total loss of respect for the local people and local environment,i understand development and moving foward, all good, but its just been a free for all, this applys to Hirafu

[bushpig 0]

shit! Take that defenders of the influx at Niseko. That sucks.

[Rag-Doll 0]

I was only suggesting that holo speak with people in Niseko because those guys have a lot of experience with foreigners buying from overseas and therefore would be able to answer many of holo's questions about that process. It's hardly a recomendation for buying in Niseko.

 

> total loss of respect for the local people and local environment

 

This has been hashed and rehashed countless times, but IMHO - it's not as if it's the 18th century and the foreigners are landing in these places and simply driving the locals off the land. Many (most?) of the land/business owners in Japanese ski resorts are struggling. Many opened their businesses/bought properties during the bubble and have been suffering ever since. Niseko’s booming popularity with foreigners has been a godsend for most of the businesses and land owners in and around the town – do you think any of the long term residents in Kutchan are complaining about increasing property values? There are certainly some people who have missed out on the financial benefits and there are some locals who bitch about the foreigners coming in and making money from developing the place - if the foriegners hadn't done it, would the locals? My feeling is, not in a million years. For the bulk of the community (builders, food suppliers, retailers, service providers, pensioner owners, bar and restaurant owners etc) the boom in Niseko is a good thing. Japanese ski resorts are a cultural wasteland and many complete lack any form of organized town planning or general business development planning. They’re almost universally ugly, devoid of character and, I suspect, barely solvent. Any form of development that forces the Japanese ski industry from it’s morbidity is a good thing.

[bushpig 0]

Agreed that the development is a good thing RD. But does that mean that people can't comment on or complain about the negative aspects of what may be going on? I find it interesting that a "local" Niseko resident had that to say about it, that's all. But you are right, this has been thrashed out a million times already.

[Fattwins 0]

How did this get flipped into the anti Niseko thing again??? I think investment and change is good but I would also hope that people respect the other people in the area. whether it be in Hakuba or Niseko.

[bushpig 0]

sorry, my throw-away jibe was what did it. Back on topic...

[Rag-Doll 0]

> But does that mean that people can't comment on or complain about the negative aspects of what may be going on?

 

Yes that's right BP. There is a list of approved views and opinions that may be expressed on SJ and that sort of anti-social commentry simply won't be tolerated. Where is Ocean when a you need a pithy put down?

 

Point taken BP. I had a long rant that I was going to post but it wouldn't have added much value to the discussion.

 

Chop - no offence intended and I've moderated my earlier post.

[bushpig 0]

Sorry then RD, I'll have to check that list next time

[Fattwins 0]

Right now Japan is a steal of a buy for a small home near the lifts. You might make something or you might not. Where are you gonna get a cabin near any lifted mountain in North America for under 150000 dollars.

[holo 0]

 Quote:

Originally posted by Fattwins:
but I would also hope that people respect the other people in the area. whether it be in Hakuba or Niseko.

Or indeed, in Sydney, London, my hometown Hailsham or any other place in the world. If moving to an area, or investing in an area you need respect and compliment that area in my view.

Anyway, back on topic, I don't want to upset the opening poster

[thursday 1]

holo,

 

This is the norm here. The forumers have been brain washed. Whenever Niseko is mentioned, posts like: "foreign influx is bad", "disrespect for locals by visitor", "violent street crime", "drunken yobs taken over the village"...etc..etc.

 

All makes interesting reading.

 

Whether you decide Niseko or Hakuba or anywhere else in Japan, there's general opinion that the Japanese ski industry is in decline. The resort that lasts longest would be the most high profile one cos that would be the one people have heard of and are more likely to visit. Here's the N word again, and the prices reflect this. Good luck with your search.