Japan, commonly referred to as the land of the rising sun, is the world’s second largest economy behind the United States. Built on the strength of its manufacturing and export sectors, the recent economic down turn has affected areas such as unemployment. However, Japan has not been as adversely affected as the US and the UK, the Yen is still viewed as a safe haven for investment reaching a high of 89.3 on 2 October.

Despite some recent economic turmoil there is great potential for economic change in Japan thanks to the recent election of the Democratic Party into parliament on 30 August; perceived as the changing of the guard and ending the Liberal Democratic Party’s reign spanning over fifty years. The Democratic Party of Japan has proposed some fundamental economic reforms during their four year term and analysts are predicting much positive change for the country.

In contrast to Japan’s largely manufacturing and export based economy is a small tourist village situated on Japan’s northern most island Hokkaido. Niseko is well known for its long snow filled winters and mild green summers with little or no wet season. Its geographical location, weather patterns and culture combine to make this village a magnet for capital growth and investment, bucking the trend currently occurring in Japan’s property market as a whole.

Over the past few years Niseko has rapidly emerged as one of the world’s prime skiing destinations. ‘Discovered’ in the late nineties by Australian skiing enthusiasts looking for quality powder as an alternative to New Zealand’s Queen’s Town and Australia’s Blue Mountains, Niseko has grown from a little known skiing village to be cited as the “second most snowiest resort in the world” by Forbes Traveler. The area enjoys some of the heaviest and most reliable snowfalls in the world with the northwest monsoon bringing moisture across the Sea of Japan from Siberia throughout November to April. This weather pattern gives Niseko an impressive average of 15 meters of snow a year compared to Whistler’s 9.1 meters and Aspen’s 7.6 meters.

What makes Niseko such a compelling investment choice however is its proximity to Asia’s bourgeoning middle classes who are keen to experience world class skiing just a short flight away. Niseko was relatively unknown in Asia until last season with visits from Singapore and Hong Kong seeing a double growth rate compared to the previous season. These numbers can be attributed to the fact that travelers chose the more localized Niseko over other destinations due to tighter budgets, this was fortuitous for the skiing village, as word spread quickly, with Asian travelers discovering the vast benefits of Niseko’s location – no jet lag, shorter flight times combined with world class snow and cuisine.

Niseko had a 100% occupancy rate for all registered accommodation throughout the 2008/2009 season – the height of the global economic crisis. Media coverage for the area has almost doubled in the last eighteen months and visitor numbers from across the globe are growing – as seen in the chart tracking Singapore, Hong Kong and Australia visitors below:



Increasing investor interest from large Asian Pacific groups further illustrates Niseko’s sustained future growth. For example recent investment activity has been made by the PCCW Group (the HK based information and communications tech company) in Nihon Harmony Resort, a company that is in the process of developing a large scale resort development in the Hanazono ski area. Other large scale investors in the area include Babcock & Brown and Citigroup.

With a vast array of summer activities such as mountain biking and white water rafting as well as beautiful scenery, Niseko is an established domestic tourist area for the Japanese looking for a retreat from their hot summers. Developers and town planners are capitalizing on Niseko’s flourishing reputation as an international summer holiday destination. For example, during the 09 summer, the G8 summit was held at Lake Toya just 30 minutes drive from Niseko. Lake Toya is not only stunning but perfect for summer sports such as wake boarding, wind surfing, sailing and water skiing. Investors can now be confident that occupancy rates on their chalets and units will be strong throughout the entire year as Niseko becomes an attractive destination all year around.

With such close proximity to so many sleeping giant nations filled with potential tourists such as Taiwan, China, Hong Kong and Malaysia, tourism growth to Niseko will continue to rise. While property prices in and around the area have dropped between 10-30% in recent months, Niseko’s medium to long term outlook is more than promising with features such as direct flights from China and Singapore, looser visa restrictions in countries such as Taiwan and China as well as a new bullet train all the way to Niseko’s main service town of Kutchan on the horizon.

In summary, what makes Niseko different from other lifestyle investment is its strong and proven potential for growth. With local and international investors driving and building its infrastructure, a prime location and premium champagne powder snow five to six months of the year, a chalet in Niseko has the potential to be perhaps one of the most enjoyable investments in your property portfolio.

For more information on this article or any of the other property services that The Henley Group can offer clients, please speak to your adviser or contact us.

The above commentary has been provided independently by IP Global Limited and is for reference only. As with any market, conditions do change and of course personal circumstances vary from client to client. You are therefore advised not to rely on the information above, but instead to meet with one of IP Global's team before deciding to follow any course of action. The Henley Group Limited shall not be responsible or liable for any damage or loss caused by the use or reliance on the information provided.