A weak yen has drawn overseas money into Japan’s real estate market, and few places show the impact as clearly as Niseko, the ski resort in Hokkaido known for its powder snow.
Land prices near the popular Hirafu slopes have jumped nearly 10 percent this year, but much of the surrounding villa land is now owned by foreign investors. Town records in Kutchan, the local municipality, are filled with foreign names—from Hong Kong, Singapore, the United States, South Korea and Australia—often posted publicly because tax notices cannot be delivered. Some of these properties have already gone to auction after years of unpaid taxes.
Driving through the area, “For Sale” signs line the roads. Many lots are carved into the forest in small subdivisions, with buyers ranging from Singaporean and Hong Kong individuals to shell companies registered in the British Virgin Islands. Some ownership structures are opaque, shifting quickly from one corporate name to another. A number of properties have been seized for tax delinquency, and local officials warn more could follow.
At the same time, new construction booms. Once-abandoned plots from Japan’s bubble era are again buzzing with trucks and hammers. Yet many worry Niseko could repeat the fate of Yuzawa, a resort town that saw a condominium glut collapse in the 1990s.
Signs of strain are already visible. This spring, a Tokyo-based developer—seen as Chinese-owned—went bankrupt after failing to pay local contractors for a resort project near Mt. Yotei. Other hotels have faced court-ordered seizures. Authorities have also uncovered unpermitted deforestation and construction, again tied to foreign-linked firms.
Hokkaido’s governor has pressed Tokyo to ensure overseas investors comply with Japanese law. Locals stress that foreign interest has helped turn Niseko into an international resort, but warn that unchecked development, absentee ownership and unpaid taxes risk leaving scars on the landscape.
The challenge, they say, is finding ways to welcome investment while enforcing rules and protecting Niseko’s future.
by MagazineKey4532