Hokkaido Land Prices Soar as Foreign Demand for Vacation Homes and Hotels Increases
Land prices in Hokkaido, particularly in areas popular with foreign tourists, have seen significant increases in recent years. This surge is largely attributed to the growing demand for vacation homes and hotels from overseas visitors.
According to data from the Land Ministry, the price of all land categories, including residential and commercial, across Japan rose by an average of 2.7% as of January 1, 2024. This marks the fourth consecutive year of increase and the highest rate since 1992.
The increase is particularly pronounced in regional areas like Hokkaido. In Kutchan, a town at the heart of the Niseko resort area, residential land prices have been steadily rising for over a decade, fueled by wealthy skiers seeking to own property in the area's renowned powder snow conditions. As of January 1, 2024, the price of 1 square meter of residential land in Kutchan jumped by 9.7% to 181,000 yen ($1,200).
The impact of tourism on Kutchan extends beyond land prices. The town's lodging capacity has expanded to match its population of 17,000, leading to a shortage of housing for workers during peak tourist seasons. To address this issue, Tokyu Fudosan Holdings, which operates a ski resort in Kutchan, has constructed a dormitory for corporate clients on company-owned land.
The surge in tourist numbers has also driven land price increases in other popular destinations like Kinosaki Hotspring in Hyogo Prefecture and Osaka's Midosuji street. In Kinosaki, commercial land prices soared by 20.2% to 238,000 yen per square meter, while rents for luxury brand stores along Midosuji street have risen significantly, pushing up land prices in the area.
These trends highlight the growing impact of tourism on Japan's real estate market, particularly in areas popular with foreign visitors. As demand for vacation homes and hotels continues to rise, land prices in these regions are expected to remain on an upward trajectory.