Japan's Land Prices Up Again!
For the fourth year in a row, land prices in Japan have continued to rise. Thanks to increasing numbers of domestic and international tourists certain areas in Japan have seen increasing land prices over the last couple of years. Nowhere is this rise more dramatic than in the Hokkaido region.
Each year, the Ministry of Land, Infrastructure, Transport and Tourism releases a report on differences in land prices throughout Japan. The survey showed that near the popular ski towns in the north of Japan witnessed a rise in residential land prices nearing 50%. But why such a dramatic rise and what does mean for property investors in the area?
Read on to find out…
Japan’s land prices continue to rise
The report by Nikkei Asian Review demonstrates that for 2018 and beyond, residential and commercial land prices across popular areas in Japan show no signs of slowing.
Indeed, commercial land prices across the country climbed at their fastest rate for eleven years.
And Hokkaido claimed the highest rate for a reason. . .
Rising land prices in Hokkaido
Tourism has been on the rise in Japan for some time now. Notorious for its unique culture, excellent infrastructure and world-class skiing – it’s no wonder. Plus, with the upcoming Tokyo Olympics, tourism numbers are set to rise from 31 million in 2018 to over 40 million in 2020.
Hokkaido has been a hotspot for international tourists for some time now. With its access to incredible snowfall as well as luxury accommodation, it has become a favourite of both powderhounds and the high-life seekers alike.
Plus, with the recent announcement that they would be extending the high-speed rail route to the area in 2024 – investment in the area suddenly looks a lot more promising. Prominent investors such as Richard Li, W, Hilton and Ritz Carlton hotels are making their mark on the area.
"Considering the planned extension of a shinkansen bullet train line and an expressway, many developers are apparently making initial investments," said Kazunori Abe, chief of the Kutchan chamber of commerce.
One of the most popular ski resorts in the area, Niseko, witnessed the most astonishing numbers for international tourism. In the winter of 2018, the resort attracted over 811,000 visitors alone.
Increasing investment in Hokkaido
Increasing interest from abroad, has meant that many international investors have been interested in Hokkaido for quite some time. In fact, there has been a huge influx of high-end condominiums and hoteliers in the areas as well as private residences.
This has been closely followed by lifestyle and infrastructural improvements. Including modern ski lifts, free shuttles, heated roads, and footpaths throughout the resort. As well as new art galleries, shops, fine-dining restaurants and luxurious spa or onesen experiences.
With commercial land prices rising 58.8% and residential 50% in 2018 – all this has meant that the main street of Niseko has become largely out of reach for domestic developers. With increasing interest in the area, the centre of Niseko is becoming a luxury few can afford.
However the same cannot be said for the rest of the resort.
Advice for investors in Japan
Despite being dubbed the ‘Aspen of Asia’ this ski town still trumps its European and American counterparts for value for money. Compared to resorts such as Aspen, Courchevel, or St. Moriz, Niseko still has average prices below €14,000 a square meter. And with free-hold ownership for foreign investors, it’s a relatively low-hassle way of investing in property abroad.
Plus, Niseko is a large resort with a variety of investments for everyone. Made up of four main villages, there are properties with excellent connections to shuttle services at far more reasonable prices.
It’s likely that in the coming years in the lead up to the Tokyo Olympics that both foriegn and domestic investment in property is likely to soar. And that at some point, it will reach a point where supply outweighs demand. That is why, to avoid disappointment, it’s important to get started early on the investment process as well as select a property that is already under development.
JNW properties are long-term investors South-East Asia and Japan and can be trusted to advise on the best development for your requirements. With upcoming developments in Raku Ichi and Snow Dog Village at reasonable prices and high predicted return, you’re likely to see significant ROI from these properties.
Get in contact with us for advice on choosing the right property for you.