Blame it on the global financial crisis, or global warming: buyer interest has cooled for snow-capped alpine property. According to data from Knight Frank, prime property prices in key ski resorts worldwide have fallen 9.1 per cent since their peak in the third quarter of 2008, and only six of the 17 ski resorts monitored recorded price growth in the financial year ending in June last year.
But after several years on a downhill run, investor reluctance seems to be thawing. Many high-net-worth individuals (HNWIs) still want to own an alpine property - 38 per cent in the United States and Canada, and 11 per cent of Asia's wealthy, according to Knight Frank surveys - especially ski-in/ski-out homes.
This is where Japan comes into the equation. With more than 500 ski resorts across the country - from Hokkaido in the north to Kyushu in the south - and developers rushing to make their mark, there are plenty of choices. And many are within a four-hour flight of Hong Kong.
The present hot spots are Niseko, called the "Aspen of Asia" and renowned for its deep powder snow, and Hakuba, with its big-mountain skiing. Furano, on Hokkaido, is considered more affordable, although its snow and scenery are equally dramatic.
Keith Rodgers, president of Niseko-based development company Taiga Real Estate and Project Management, says it's difficult to quantify sales figures, as trading price is not on public record in Japan. He notes, though, that Niseko is experiencing "the best tourism numbers since 2007" - visitor numbers jumped 103 per cent in the 2011/12 season, according to the Niseko Tourism Board.
"People are blown away by the massive amounts of snow, and combined with the sliding yen, real estate companies have received a huge spike in property inquiries," Rodgers says. "There's still been some sitting on the fence, as buyers were waiting for the yen to break 100, but the feeling on the ground is that these inquiries will translate to sales in the coming winter."
Local lawyer Satoshi Yoshida, who handles the bulk of property title transfers in the Niseko area, reports a 61 per cent volume increase last winter over the previous year. Hong Kong now accounts for the largest segment of these buyers.
Eloise Sutton-Kirkby, co-owner of One Chalets, a portfolio of high-end alpine chalets for rent in Hakuba-Nagano, notes a similar trend among the tourist demographic. "We've seen a drop-off in visitors from Australia and New Zealand - now, Hong Kong and the Chinese mainland make up the bulk, and they're also coming from Singapore and Malaysia."
Rodgers explains: "Niseko has become the temperate resort of Asia, largely because it allows for a great ski or golf holiday without a noticeable time difference. This is a massive bonus for Hong Kong families with young children, and also for executives who need to squeeze some work into the holiday. This convenience, combined with the delicious Japanese food, is increasingly leading buyers to choose Niseko over North American and European resorts."
Buyers increasingly have lifestyle as their primary objective, he adds. "Almost uniformly, the buyers want their kids to get in touch with nature and enjoy Niseko's clean living. Some of the largest million-dollar-plus chalets are not in the rental market, and an exit strategy is spoken of within a 20-year time frame.
"Of course, these are also very savvy investors, and they recognise that Niseko has only just begun to make a splash on the international ski scene."
Chris Lane, IP Global's Japan specialist, agrees. "Asian investors and tourists want to enjoy their rising wealth in a location different from their urban lifestyle," he says. "Niseko offers a clean, green and safe environment, with fresh mountain air, delicious food and the second-snowiest ski resort in the world."
IP Global's latest market report also rates Niseko as "an undiscovered opportunity". Its data shows that the number of Chinese who ski has grown from 10,000 in 1996 to 5 million in 2010.
The firm is marketing Akazora, comprised of studios and two-bedroom apartments up to a four-bedroom penthouse. Lane says the property is structured as an investment play as opposed to purely a lifestyle investment, which means higher rental yield at lower cost. Apartments cost from HK$1.7 million to HK$6.3 million.
Another option for entry-level buyers is fractional property ownership, a concept fairly new to Niseko.
It allows investors to "live the dream" for a few weeks each winter without the outlay and management issues of outright ownership.
Taiga Real Estate and Project Management is marketing Chalet Kitsune, a seven-bedroom luxury chalet with the services and amenities of a hotel, for fractional ownership. Prices for a one-fifth ownership in Niseko range from US$110,000 to US$350,000. When not occupied by the owners, the properties are available to the general public. Both of these luxury developments mark a new stage of foreign investment in Niseko, according to Rodgers.
"The early days were driven by individual investors and lifestylers, but the second stage will be driven by much larger developers," he says. "Most of the upper village is now owned by large international developers and, with a recent relaxation in development laws, we should see a new wave of hotels popping up at the base of the slopes."
A major upgrade of the road infrastructure and beautification is under way, which will have a big impact on how people perceive the village, he adds. "The hotels and roadworks represent hundreds of millions of dollars in investment, and this will spurn a second wave of individual investors to seek out lifestyle properties in Niseko."