Niseko, Japan Property Market Review November 2017
Luxury international hotel brands hit Niseko’s property market with Asian buyers as key driver Sales volume surges as Niseko becomes year-round destination “While Niseko has always been known as a winter holiday destination, the rising number of tourists arriving during the summer has driven the property market boom and is becoming a factor influencing property sales. Since 2012, tourist arrivals from May to November have consistently matched those from December to April, with 2016 totaling 1,671,302 visitors. This is mainly due to the shifting source markets, from the legacy ski set to a more Asiancentric profile. Likewise, nationalities of real estate buyers reflect the new demand group.
Winter vs. Summer Visitation Trend Number of Visitors 1,000,000 800,000 600,000 400,000 200,000 0
2012
2013
Winter Visitors
2014
2015
2016
Summer Visitors
Source: Niseko Town Of�ice and C9 Hotelworks Market Research
Consequently, new residences are becoming more varied compared to previous product offerings, which mainly focused on ski-related features. New developments are now accentuating features such as private onsens, design-led architecture, and international hotel brand affiliation. Nevertheless, classic facilities such as ski-in-ski-out access remain a key driver of premium pricing.
The new trend expected to redefine ‘luxury living’ in Niseko is the arrival of international hotel brands, with Park Hyatt, Ritz-Carlton and The Pavilions featuring prominently in the pipeline. These brands are expected to transform what was once a seasonal market into a mainstream year-round destination, and thus driving the cyclical growth of real estate even higher.” Bill Barnett, Managing Director, C9 Hotelworks
Trends
Forward Outlook
• The absorption rate for condominiums averages 1.83 units sold per month, while houses and land plots achieve a lower sales pace of 0.37.
• There are six developments currently in the pipeline, with an additional 151 units and plots expected to come on stream by 2019.
• Properties in Niseko mainly cater to international buyers, with Singapore, Hong Kong, Mainland China, Taiwan and Thailand being the top five source markets.
• Buyers are placing higher emphasis on investment returns, with lifestyle investors representing up to 80% of demand for condominiums and 60% in the housing market.
• Families with children make up the majority of demand, and typically take between two weeks to one month from the time of registered interest to making a decision to purchase.
• Increased accessibility from the new Shinkansen service between Tokyo and Hokkaido as of March last year is expected to increase visitor arrivals and the popularity of Niseko as a year-round destination.
Condominium Market • Currently, the brand premium of condominiums with international hotel affiliation can be up to 22% in terms of the built-up sales price, compared to the market-wide average.
Average Sales Price by Configuration Penthouse
Three-bedroom and above Two-bedroom
One-plus-one
One-bedroom
Studio
0 2,500 USD/Sq.m.
5,000
7,500
10,000
Avg. Interior Price
12,500
15,000
Market-wide built-up sales price averages USD12,787, driven by the high price of larger-sized units
Avg. Built-up Price
Source: C9 Hotelworks Market Research
Sales Performance of Sold-out Projects vs. Projects for Sale USD/Sq.m. 15,000
Unit/s Sold per Month 2.00
12,500
1.50
10,000
7,500
1.00
5,000 2,500
0
0.50 Sold-out Projects
Avg. Built-up Price
Projects for Sale
Avg. Interior Price
Monthly Sales Pace by Configuration Unit/s Sold per Month 0.90 0.80 0.70 0.60 0.50 0.40 0.30 0.20 0.10 0.00
0.00
Monthly Sales Pace
Source: C9 Hotelworks Market Research
Number of Units 140 120 100 80 60 40 20 0
Monthly Sales Pace Total Units
Source: C9 Hotelworks Market Research
2
C9 Property Market Review: November 2017
Built-up sales prices have surged 52%, while absorption rate more than doubled versus sold-out projects
Two-bedroom configurations are the most popular for condominiums, achieving an average of 0.85 unit sold per month
Housing Market • There are two types of product offering in the housing market: inclusive land and house packages and separate land plot sales. The all-inclusive type typically offers house configurations of two or more bedrooms.
Average Built-up Sales Price of Recent vs. Older Projects
New developments offering land and house packages have an average built-up sales price of USD9,820
USD/Sq.m. 12,000 10,000
8,000 6,000 4,000 2,000
0
Recent Projects
Older Projects
Source: C9 Hotelworks Market Research
Monthly Sales Pace by Configuration
The monthly sales pace for land plots is driven by properties with the flexibility for buyers to customize houses
House/Plot Sold per Month
Number of Houses/Plots
60
0.60
50
0.50
40
0.40
30
0.30
20 10 0
0.20 Two-bedroom
Three-bedroom
Houses/Plots Sold
Four-bedroom and above
Houses/Plots Available
Type
Expected Launch
Hotel Af�iliation
114
Q4 2019
Hyatt Hotels
Land Plots
15
2019
Pavilions Hotels & Resorts
Townhouses
N/A
N/A
YTL Hotels
Panorama Niseko
Intuition
Houses
The Ginto Residences (Phase 2)
Kasara Niseko (Phase 2)
The Ritz-Carlton Residences
Monthly Sales Pace
Total Units
Hotel and Condominium Houses
Park Hyatt Hanazono Residences
N/A
12 10
N/A
0.00
Source: C9 Hotelworks Market Research
Hospitality-Managed Residences Pipeline Name
Land Plots
0.10
Dec-17 Dec-17 N/A
Niseko Real Estate N/A
Marriott International
Source: C9 Hotelworks Market Research
C9 Property Market Review: November 2017
3
Niseko Tourism Overview Access by Air New Chitose Airport is the main gateway to Niseko, with inbound passengers totaling 10,585,025 in 2016. Arrivals via international flights experienced a 10-year CAGR of 13.9%, compared to 0.8% for domestic passengers.
Top 10 Air Routes to New Chitose Airport by Passenger Traffic Rank 1
Tokyo (Haneda)
3
Nagoya (Chubu)
5
Osaka (Kansai)
2
4
Sapporo
6
7 8
New Chitose Airport
9
Niseko
Route
10
Passengers
% of Total Passengers
9,669,891
45%
1,411,685
7%
Tokyo (Narita)
1,727,155
Osaka (Itami)
1,162,205
5%
769,995
4%
1,157,861
Seoul
Sendai
757,924
Taipei
732,063
Fukuoka
535,442
Kobe
495,983
8%
5%
4% 3%
3%
2%
Data as of FY2016
Niseko Tourism Characteristics 22%
46%
46% 54%
54%
78%
Day Trips Overnight Visitors
Travelers from within Hokkaido Travelers from outside Hokkaido
Summer Visitors Winter Visitors
Source: Japan Ministry of Land, Infrastructure, Transport, and Tourism, Niseko Town Of�ice 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 www.c9hotelworks.com info@c9hotelworks.com