From Beach To The Mountains- How Asia's Luxury Property Market Finds Investment In The Hokkaido
In the past couple of years, Hokkaido has gained popularity among the Japanese and foreign investors looking to own property on the ski slopes as a second home for escaping the hassle of the city life, a holiday retreat destination or to rent out when they are away. This investment spree began a decade and a half with some small units in Niseko ski slopes and has now spread to larger properties, including resorts.
Aside from winter, Hokkaido offers a high-quality life and nature in other seasons. In this piece, we will explain why investors and foreigners are moving away from land in the seas and oceans to the land on the Hokkaido mountain slopes.
The Real estate market
First off, the real estate market in Hokkaido is different from other areas in Japan (including the mainland). Hokkaido is one of the least populated areas in Tokyo, with a population density of about 65 people per kilometre. In comparison to Tokyo’s population, this is about 1%.
Secondly, Hokkaido is the second largest island in Japan. And given that it is in the most northern area, it is exposed to colder climate (harsher winter), which translates to denser snow and long ski seasons.
Now, due to the low population density, the beautiful nature, and the existing ski resorts, Hokkaido is a popular holiday destination for tourists looking for an adrenaline rush on the slopes.
But even with its beauty and popularity as a ski holiday destination, Hokkaido’s population continues to drop. In fact, the island has one of the highest depopulation rates in Japan. Though this was seen as a negative a few years back, it is now a positive as the land is cheaper than in the mainland.
The Incredible Prices
The difference in the real estate markets in Hokkaido and the mainland are clear. Here is an analogy to sink the point deeper.
With about $200,000, you can purchase a three-bedroom apartment on the mainland or even a 3-bedroom mansionette. However, with the same amount of money, you can purchase an entire apartment with ten units.
But even with lower price tags, the real estate market has been growing steadily since 2012. According to a 2018 property market report, the price of a condo had increased by 25%. So, not only is the price lower in comparison to other regions, but it is also growing fast.
Given its beautiful landscape and thick snow in winter, Hokkaido is a major tourist hub for both foreign and local tourists. As an island, they are taking steps to ensure that this remains as it is. When casinos were legalized, investors embarked on a journey to build the first casino in Japan to diversify entertainment in the region.
The tourism boom affords investors to put their money in residential properties and resorts. They can rent these out and yield great returns over the years.
If you are planning on investing in a property in Asia, focus on apartment buildings close to tourist hubs, and ski resorts.
Owning property in Hokkaido
Aside from being a popular tourist destination, there are other factors that come into play in the real estate industry in Hokkaido and Japan as a whole.
First, we should lead by saying that foreigners are allowed to own land in Hokkaido, Japan. Picture this – as foreigners have the same rights in the real estate industry as Japanese nationals.
This means that when you buy land as a foreigner, there is no expiration date on the proprietary rights. You can buy, sell and inherit property as you please. Also, you pay the same tax paid by Japan citizens. This is a big deal as real estate regulations aren’t the same in other countries.
In some countries, like Indonesia, and Myanmar, foreigners cannot purchase real estate. In others like the Philippines, Singapore, China and Thailand, foreigners are allowed to own property but not land. Clearly, these laws have contributed to the real estate boom in Hokkaido.
In addition to the above, buyers in Hokkaido have the luxury of choice among villas, houses, and apartments available in different architectural styles. The land on the mountains also provides a unique opportunity to build and design a dream ski home with ease. With all these, you should expect to pay a premium for a penthouse on the mountainside than a regular house or apartment. But then again, property on the mountain will yield a higher return.
It is important to note that owning land in Hokkaido does not mean that you will get a special visa or the right to permanent residence on the island.
Infrastructure is the number one factor that drives the real estate industry. Both private and public sectors admit that they examine the infrastructure of an area to determine where to set up real estate developments. Niseko and Hokkaido are no different. You see, as a popular tourist destination since the 1990s, the infrastructure in the region is well developed. For instance, you can explore Hokkaido by train- the bullet train, which travels at 260 km/h through Hokkaido and the city.
With this, people are ready to move to the mountains knowing that they will not have a problem getting to their destinations. Its proximity to other Asian countries is also a plus for the Island.
Owning land in a popular ski holiday destination is a dream for many people. What’s even better is that the stars seem to have aligned for all those who have had their eyes set on Hokkaido and other popular ski destinations in Asia.
With global warming changing temperatures and causing a rise in sea levels, the mountain slopes look even more appealing. However, with the increased attention and demand, the price of a property in Hokkaido is set to continue rising in the coming years. So, if you would like to get a piece of the cake, you should have your slice soon. If the 25% annual price increase is anything to go by, then Hokkaido will quickly get out of reach for many. Head to our properties page now and discover how you can get your hands on your very own piece of Niseko wonderland real estate with SnowDog Village.