​Construction Costs Spiking in Niseko and all of Japan

So what's up with construction prices in Niseko? They are up, part of a bigger trend across the country. Quotes for pending Taiga projects have been up significantly over a year ago, by as much as 20 ~ 30%. Collaborating Sapporo architects have been cringing, since their initial advice based on years of experience rings a little hollow when the quote slides across the table. Unfortunately, the reasons are much bigger than our little Niseko property market:

1) Large infrastructure and peripheral residential/retail projects for the Olympics means the big construction companies are already locking in available labour. The larger construction companies starting telling me this shortly after the Olympics were announced, and I initially dismissed it as an excuse to justify a higher quote. But then I started hearing trickles that rebuilding in tsunami affected Tohoku is suffering, due to the "Olympic labour shortage". The Big Boys have put the word out to form carpenters and steel workers… something like "whether there is work or not, you are with us for the next 6 years".

2) Massive infrastructure projects in the tsunami affected areas are finally underway. Hard to believe, given the tsunami happened in 2011, until you have worked with Japanese bureaucracy. The scale of the rebuilding is hard to fathom… we are talking about 100s of kilometres of coastline.

3) The increase in consumption tax to 8%, and talks of raising it to 10% (currently delayed), has created a construction boom for individual houses and apartments. I have never seen so many new houses in the neighbouring farming towns of Kutchan and Niseko. Locals, who have nothing to do with tourism, have been building homes and renovating in record numbers.

4) The ageing population means tradesmen are starting to retire in big numbers. Walk onto any job site in Japan, and I can pretty much guarantee you the average age is over 50. When the owner of Kazahana came for a site inspection, he marvelled that amongst the 5 regular carpenters, there was a combined experience spanning 180 years. The upside is a phenomenal execution on the details. But the downside is just over the horizon, part of the larger impending population crunch. Sure, construction demand should also decrease concurrently, but it seems in the short term that the pending Olympics and rebuild in Tohoku are going to create a de-linking between labour and demand in the short term.

So let's raise a glass to the weak yen, which has been the only bright light in this builder's market. The diving yen can almost make the increase balance out for foreign investors (harder on us locals!). My parting advice for anyone thinking about building in Niseko is to stock up on cheap yen, because the high construction prices are probably here until the flame goes out at the Tokyo Olympics.

Keith Rodgers is the Managing Director of Taiga Project Management

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Hirafu-Niseko Infrastructure to Receive Funding

  • Keith Rodgers
  • June 25, 2014
  • Niseko

Very exciting news, as Kutchan Town Government has announced just over 900,000,000 yen in much needed funds (mainly from the central government) for infrastructure in Hirafu Village. Taiga Real Estate and Project Management was appointed as the sole foreign representative on the steering committee, consisting of local businesses, municipal and district government. We believe in active contributions to affect change, even though this often means volunteering for spans stretching into years.


Riccardo Tossani, architect and urban designer of Riccardo Tossani Architecture (Tokyo and Niseko) was appointed as a special observer to the steering committee , advising the committee, comparing master planning strategies in other famous resorts and participating in decision-making processes. Community meetings were held several times last year, and locals had the opportunity to make suggestions. The proposed budget includes the following items:

  • 600,000,000 yen – Community center (police station, post office, conference facilities, ATM)
  • 160,000,000 yen – Parking lot and bus loop works at the WelcomeCenter parking lot
  • 22,000,000 yen – Area signage
  • 10,000,000 yen – Main symbol sign
  • 16,000,000 yen – Street Banner fixtures
  • 50,000,000 yen – Emergency information system
  • 70,000,000 yen – Road upgrades/new sidewalk between Hirafu-zaka (Alpen Hotel) and the gondola

Further community consultations are still needed to refine the budget, but this is a great announcement about new amenities. A fixed timeline has yet to be announced.

Niseko Hirafu Welcomes Change in National Park Building Regulations

  • Taiga Staff
  • June 24, 2012
  • Niseko

Niseko – Hirafu Village is about to see a new chapter in the area development, as a result of changes to the national park building regulations. On July 27, Hokkaido Governor Harumi Takahashi granted a special exemption, which will allow the development of strata titled condominium hotels within Hirafu’s section of park. The vast majority of the ski-in, ski-out sites within Hirafu Village fall within this area, and most of these sites have changed into foreign ownership in the past few years. The impact for Hirafu Village, and the Niseko area in general is potentially huge, and I anticipate a large number of new developments, possibly with hundreds of condominium units.

Previously the park was zoned favorably for hotels, but was unclear for the less traditional condominium hotels, which was making it difficult for government to grant approval to new developments. The exemption will essentially extend the current building regulations for Hirafu Upper Village up into the park:

- Maximum height of 22 meters (about 6 stories)
- Building Coverage Ratio (Footprint) of 40% (previously 20% for non-hotels)
- Floor Area Ratio (Volume) of 300% (previously 60% for non-hotels)

The government has chosen to enforce a stricter setback of 10 meters from the road and 5 meters from the neighboring site. Upper Hirafu Village has setbacks of 4 meters from the road, and 2 meters from the neighboring site).

Each condominium will be compelled to provide accommodation services with the inn keeping license, which means that owners will not have the option of a condominium purely for private use. In addition, it is likely that each building will be compelled to reserve the ground floor for common space, for restaurants, onsens, spas, shops, and other commercial area. The purpose of these two rules is the underlying principle that the park is for everyone’s use, and both buildings and individual units should be accessible to the paying public.

The ruling applies to individual sites which currently or previously had hotel accommodation, rather than being a zone based rule. This means that existing parking lots will essentially remain.

Over the past few years, we have seen the demolition of Yamada Onsen, the Scott Hotel, Kogen Hotel, J-First Hotel, Takagi Sansoo, Uranako Lodge, and Ginreisoo. The loss of overnight hotel beds is especially onerous for Japanese tourism numbers, as the Japanese have short holidays and prefer fully serviced accommodation. Since Japanese still account for the majority of lift tickets, Grand Hirafu Resort has been feeling the pinch. The Governor’s special exemption essentially requires these developments to act as hotels, with large common areas and enforced letting, and many locals are hopeful that the needs of the domestic Japanese market will also be met.

Click here to download the special exemption (Japanese only).

The lots indicated in red are the affected areas of the exemption.

Hirafu National Park Exemption Map

Radiation Levels Low in Hirafu Village and Around Hokkaido

  • Taiga Staff
  • November 08, 2011
  • Niseko

The Hokkaido Government has begun taking radiation readings in Hirafu Village, in front of the Welcome Center by the Alpen Hotel. The Japanese government says the acceptable national limit is 3.8μSv/h, and radiation levels taken in Hirafu Village show levels of under 0.05μSv/h. This tiny amount is actually lower than residual radiation levels in many major overseas urban centers.

You can see monthly updates on the radiation levels on the Hokkaido Government website, which shows tourism areas around Hokkaido. Hirafu Village in Niseko is listed the third from the top, and the radiation reading for October is 0.036μSv/h:

360Niseko has been doing their own independent radiation readings in Niseko, and you can read them here:

Daily readings from Kutchan Town are available as well:

Part of the reason to publicize these readings was to address a great concerns from overseas tourists. With handheld radiation readers easily available, it is also easy to confirm these readings. With these low radiation levels, hopefully anyone planning a trip to Niseko will feel at ease.