For those looking to invest in the Japanese Market, there are a few things you need to get your head around before even considering a purchase.
Current Situation
Japan is coming out of a decade of recession. During this time land prices have fallen drastically. According to recent data, the falling price trends have halted in the major cities and are spreading out into the countryside. Land prices in Hakuba have fallen approximately 10% over the past 12 months and are currently at 20-30% of their value during the 1998 Olympic Games.
House Prices
Houses in Japan are viewed the same as cars are in the West. The value of a house depreciates over time until all that is left is the land value. In many cases the house actually detracts from the land value as it needs to be removed before the land can be reused. The figure bandied about a lot is 30 years, but as construction and materials improve, so to does the lifespan of a building.
The main point here is that investing for a capital gain is currently not really an option in Hakuba. And unless Hakuba really takes off as a ski destination, this is unlikely to change. The investor most suited to Hakuba are those looking to operate a business (accommodation, restaurant etc) or the lifestyle investor, who wants a place for their own use, but would like to generate some income while they are not using it.
Properties on the Market
The greater Hakuba area has over 700 accommodation properties. With dwindling skier numbers, this has lead to a huge over supply of beds. The worst hit are those that bought or built during the late 80s or early 90s at inflated prices and are now saddled with huge dept on a property that is worth only a fraction of what it was. Many of these properties are operated by owners with little or no marketing skills, who built or bought with the Field of Dreams mentality "if you build it they will come...".
Another trend is that that many owners who built during the peak ski years in the 70s and 80s are approaching retirement, and with no one to carry on the business they are selling up.
There are currently very few cabins or houses on the market. Many of the ones that are 25-30 years old and are in dire need of repair. There has been a move towards building log cabins in recent years, but there are still very few coming on the market.
Location
Being spread out over a valley, with many ski resorts, there are several different places worth investing in. The most well known resort is the Happo One (pronounced oh-ne). At the base of Happo One is the main Happo village as well as the Wadano Forest area. Happo is in many ways "old Hakuba" with many of the hotels and other businesses in the area being owned and run by the same family for many generations. Not too many properties in central Happo come on the market, even though it is not the thriving area it once was. A major hindrance to development in Happo is that to build a commercial building here requires the stamp of approval of the local residents association. Currently this is being sold for 10,000yen per square meter of floor space. This has halted most development in it's tracks as the town office will not accept building applications without this stamp.
Wadano is a very attractive forest area that runs up the side of Happo One along the Saka slopes. There are not major hindrances to development in this area, and for people looking for a property close to the Happo One slopes, this is usually the best option.
A short drive from Happo One is the Echoland and Misorano areas. Like Wadano, these are forest areas that have a lot of B & B type accommodation. Echoland's main street used to have Hakuba's most active nightlife, and with some recent foreign investment here, this area should once again become popular. Shuttle buses run to all the major resorts from most parts of this area.
Across the Hirakawa River is the Meitetsu and Goryu areas that serve as the bases for Hakuba Goryu and Hakuba 47 ski resorts. The Meitetsu area is also a forest, but without the services of Echoland. Goryu is a popular area with several foreign owned accommodation properties and bars.