Niseko, Japan Tourism and Property Market Review July 2019
Large-scale developments elevating Niseko’s tourism and property sectors into a new cycle Niseko’s real estate market continues upward momentum “Niseko has continued to ignite the imagination of both overseas and a growing number of Japanese developers and investors, as property prices continue to soar. The tourism market experienced some volatility last year but this has countered by strong growth in airlift and a diversification of inbound markets. With direct international flights from eight cities in Mainland China, the growing Chinese segment is highlighting the summer season and geographic source market shift. The rising number of Mainland Chinese pushed a 3-year CAGR of 13%. In the property market, buyers from Hong Kong and Singapore have remained a core base of business. Asian-based buyers are rising with some developers tapping financial institutions to offer loans. Emerging regional buyers from Taiwan, Thailand, and Malaysia reflect the new Niseko reality.
Trends
Top 5 International Visitor Source Markets Number of Visitors
%
80,000
16
60,000
12 8
40,000
4
20,000
0
-
-4
2016
2018
3-Year CAGR
Source: Niseko Town Office and C9 Hotelworks Market Research
Meanwhile, domestic buyers especially from outside Hokkaido are targeting investment in hotel branded projects and family-friendly properties. We are seeing Hirafu’s spillover demand radiate to peripheral areas including Higashiyama, Annupuri, and Hanazono, while broader alpine real estate development is spreading to farther away areas such as Furano.” Bill Barnett, Managing Director, C9 Hotelworks
Forward Outlook
•
Total annual transaction value in the condominium segment hit USD1.3 billion, rising by 44% y-o-y while house/land plot market accounted for USD273 million.
•
An expanded road link between Otaru and Yoichi will be opened by Q4 2019. Afterward, the Hokkaido expressway will extend a 39kilometer route from Yoichi to Kutchan.
•
Sales prices between USD1 to 1.5 million are the sweet spot in condominium and house/land plot segments.
•
The Shinkansen train link between Hakodate and Sapporo via Kutchan Station is expected to be completed in 2030.
•
Direct international flights to Hokkaido increased to 22 cities with Manila - Philippines, Helsinki - Finland, Kaohsiung - Taiwan, Dailian – China and Vladivostok - Russia.
•
Moiwa Ski Resort will include a adventure park, new lifts, and hotels. Hanazono is set to expand their alpine village development with additional hotels and residential properties.
CONDOMINIUM MARKET Condominiums by Area
Condominiums Pricing Strata 2% 24%
34%
26%
38% <USD500,000
10%
USD500,001 - 1,000,000
Hirafu Outer Hirafu Nearby alpine resort areas
28%
USD1,000,001 - 1,500,000 USD1,500,001 - 2,000,000
38%
>USD2,000,001 Source: C9 Hotelworks Market Research
Condominium Unit Sizing
Transaction Highlights Value in Million (USD)
No. of Units
In sq.m
400
600
600
500
500 300 400
400 300
300
200
200 100
200
0
100
OneBR
TwoB R
Three BR
Fourand FiveB R
Penth ouse
23
49
48
79
215
241
Max
73
101
174
179
341
516
Average
47
77
107
157
280
352
Studio / Suite Min
100 0
0 Hirafu
Outer Hirafu
Sales Volume
Nearby alpine resort areas Number of Units
Source: C9 Hotelworks Market Research
Sales Performance and Average Sales Price by Configuration Unit/s Sold per Month
Price in USD 8,000,000
12
6,000,000
9
4,000,000
6
2,000,000
3
0
0 Studio/Suite
One-bedroom
Two-bedroom
Average Absolute Sales Price
Three-bedroom
Four-and Fivebedroom
Penthouse
Average Monthly Sales Pace Source: C9 Hotelworks Market Research
2
C9 Niseko Tourism and Property Market Review: July 2019
HOUSE/LAND PLOT MARKET House Built-up Area Mix
House/Land Plot Pricing Strata
12%
21%
11% 13%
36%
38% 7%
7%
< 100 square meters 101 - 300 square meters 301 - 500 square meters 501 - 700 square meters > 701 square meters
<USD500,000 USD500,001 - 1,000,000 USD1,000,001 - 1,500,000 USD1,500,001 - 2,000,000 >USD2,000,001
23% 32%
Source: C9 Hotelworks Market Research
Sales Performance and Average Sales Price by Configuration House/Land Plots Sold per Month
Price in USD 4,000,000
1.6
3,000,000
1.2
2,000,000
0.8
1,000,000
0.4
0
0.0 Two-bedroom
Three-bedroom
Four-bedroom
Average Absolute Sales Price
Five- and Six-bedroom
Land Plots
Monthly Sales Pace Source: C9 Hotelworks Market Research
Hotel and Property Development Pipeline Development Name Andura Villas Ritz-Carlton Reserve DRIFT Niseko Kabayama Niseko Sansui Niseko Aozara The Pavilions Niseko Resort Park Hyatt Hotel and Residences Aruku-zaka Aruku-zaka Aruku-zaka Aura Niseko Aman Niseko Tellus Hirafu Kasara Phase II
Location Higashiyama Niseko Village Outer Hirafu Kabayama Upper Hirafu Middle Hirafu Outer Hirafu Hanazono Middle Hirafu Middle Hirafu Middle Hirafu Higashiyama Moiwa Outer Hirafu Niseko Village
Keys 11 50 15 4 60 N/A 42 214 168 126 60 51 31 N/A N/A
Type Hotel Hotel and Residences Houses/Land Plots Houses/Land Plots Hotel Hotel Hotel and Residences Hotel and Residences Apartments Hotel Residences Retail Apartments Hotel and Residences Hotel and Residences Residences
Opening Year Q3 2019 Sept 2020 2020 2020 2020 2020 2020 Jan 2020 2024 2024 2024 TBA TBA TBA TBA
Source: C9 Hotelworks Market Research
C9 Niseko Tourism and Property Market Review: July 2019
3
TOURISM OVERVIEW 10-Year Total Visitor Arrivals to Niseko No. of Visitors 2,000,000
20%
international arrivals grew by 4% for the full year 2018
15%
1,500,000
10%
1,000,000
5% 0%
500,000
-5%
-
-10% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Total Visitor Arrivals
Growth %
Source: Bureau of Tourism, Hokkaido, Niseko Town Office, and C9 Hotelworks Market Research
Niseko Tourism Characteristics
24% 41% 49%
51% 59% 76%
Day Trips Overnight Visitors
Travelers from within Hokkaido Travelers from outside Hokkaido
Summer Visitors Winter Visitors
Source: Bureau of Tourism, Hokkaido, Niseko Town Office, and C9 Hotelworks Market Research
Top 5 International Geographic Source Markets Winter Season Source Markets 1. Australia
Growth
Total
Winter Season Emerging Markets
Total
-8%
28%
22%
10%
-15%
17%
28%
6%
-4%
12%
2. U.S.A 3. Thailand
7%
5%
22%
10%
4%
6%
4. Malaysia 5. Indonesia
8%
28%
3%
1%
Growth
Total
Growth
Total
1. Mainland China
40%
24%
1. Mainland China
40%
24%
2. Hong Kong 3. South Korea
-6%
20%
4%
17%
2. Thailand 3. Malaysia
48%
4%
24%
3%
-11%
11%
119%
1%
-8%
5%
4. U.K. 5. Indonesia
72%
1%
2. Hong Kong 3. Singapore 4. Mainland China 5. U.S.A. Summer Season Source Markets
4. Taiwan 5. Singapore
Summer Season Emerging Markets
Source: Bureau of Tourism, Hokkaido, Niseko Town Office, and C9 Hotelworks Market Research
4
Growth
1. Mainland China
C9 Niseko Tourism and Property Market Review: July 2019
Niseko Tourism Overview Accommodation Establishments by Area 1%
5%
18%
Hirafu
13%
63%
Accommodation Establishments by Type No. of Keys
%
3,000
36
2,000
24
1,000
12
0
0
Niseko Village Annupuri Hanazono Others
2017
2018
Growth %
Source: Bureau of Tourism, Hokkaido, Niseko Town Office, and C9 Hotelworks Market Research
Restaurants and Bars by Area
13%
Restaurants and Bars by Type
2%
17% 40%
17% Hirafu 68%
22%
Japanese Restaurants
Niseko Village
Other Restaurants
Annupuri Hanazono
Bakeries and CafĂŠs 21%
Bars
Source: Bureau of Tourism, Hokkaido, Niseko Town Office, and C9 Hotelworks Market Research
C9 Hotelworks Company Limited 9 Lagoon Road, Cherngtalay, Thalang, Phuket 83110 Thailand (Office located at the entrance of Laguna Phuket) T: +66 (0)76 325 345
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