MIJ powerd by Japan-Property

Otaru City, which has begun to attract attention from overseas investors who are familiar with Hokkaido.

When it comes to popular areas for real estate investment in Japan among foreign investors, Hokkaido's Niseko and Sapporo are often mentioned. However, located midway between these two popular areas is Otaru City. Situated near the central-western coast of Hokkaido, Otaru is approximately 40km northwest of Sapporo and about 60km northeast of Niseko. It offers a range of activities throughout the four seasons, including hiking in spring, beach activities in summer, autumn foliage viewing in fall, and skiing in winter, all amidst a rich natural environment.

Travel Time from Otaru to Sapporo and Niseko

From Otaru to Sapporo, it takes approximately 45 minutes by car when using the expressway, and about 30 to 40 minutes by rapid train. To reach Shin-Chitose Airport, the main gateway to Hokkaido's skies, it takes approximately 75 minutes by rapid train. Additionally, to access Niseko, it takes about 1 hour and 40 minutes to 2 hours by both car and train.

The History of Otaru

Otaru City prospered in the past through herring fishing and also developed as an industrial port for loading and unloading materials, serving as the gateway to Hokkaido's colonization, which began in earnest in the mid-1800s. Symbolizing Japan's modernization, during its peak, Otaru accumulated immense wealth through trade in Hokkaido products such as herring and high-quality coal mined in Hokkaido. It was then a major economic center in Hokkaido, rivaling Sapporo.

Transformation into a Major Tourist City

After reaching such heights of prosperity, Otaru suffered a rapid decline in its economic power after World War II due to declining herring catches and the transition from coal to oil for energy. Remnants of its former glory can be seen in historical structures like the Otaru Canal and the warehouse district. Today, Otaru has transformed into a modern area lined with cafes and shops, attracting nearly 8 million tourists annually, making it a major tourist destination.

Otaru, known for its glass craftsmanship and sake brewing.

Otaru prospered as a fishing town, leading to the flourishing production of glass floats and oil lamps used in fishing. With the changing times, the use of glass products in fishing has declined, but now glass craftsmanship thrives primarily in daily necessities, interior decorations, and accessories. Currently, there are over 60 stores in the city that manufacture and sell unique glass items and souvenirs, making them very popular as Otaru tourist souvenirs. Moreover, Otaru has been prosperous in sake brewing due to its abundant high-quality water resources surrounded by rich forests and nature. Sake, especially, is made primarily from rice and water, with water constituting about 80% of its ingredients. To cultivate high-quality rice, good water is essential, and as water is used multiple times in the brewing process, including rinsing the rice and diluting the original sake, good water is indispensable for making delicious sake. In addition to sake breweries, there are also wineries and breweries in the city, and neighboring town Yoichi is home to the NIKKA WHISKY distillery, founded by Masataka Taketsuru, known as the father of Japanese whiskey. Visitors to this area can enjoy various types of local sake and even take factory tours.

Experiencing prosperity and decline, Otaru City is now bustling with tourists. However, in recent years, it has quietly gained popularity among overseas investors who have already purchased real estate in other areas of Hokkaido such as Sapporo, Niseko, and Furano. So, why has real estate in Otaru started attracting attention? Let me introduce the reasons below.

The reasons why investors are paying attention to real estate in Otaru.

1. Good access to ski resorts of all sizes.

There are plenty of ski resorts scattered around Otaru City, so you can enjoy different ones every day.

Main ski resorts accessible for day trips from Otaru City.

2. It's relatively easy to aim for a gross yield of around 20% with vacation rental operations.

Like other regional cities in Japan, real estate prices have decreased due to population decline. However, there is increasing demand for accommodation facilities from both domestic and international tourists, making it possible to aim for high yields. Additionally, the advantage of lower property prices means you can acquire a second home for vacationing in Hokkaido at a lower cost.

3. The Hokkaido Shinkansen is scheduled to open.

The Hokkaido Shinkansen, currently operating up to Hakodate, is scheduled to be extended to Sapporo, with a planned stop in Otaru. The station is expected to be completed in September 2025, with the Shinkansen service slated to commence in 2031. The Shinkansen station is planned to be located in Kutchan (Niseko), and with its opening, travel time to Sapporo will be reduced to 12 minutes and to Niseko to 13 minutes. With increased convenience, real estate in Otaru is likely to become even more popular in the future.

4. The attraction lies in the seafood and other foods.

I think many people who love Japanese seafood, including sushi, would also enjoy Hokkaido's seafood, which is considered special even by Japanese standards. Otaru, being a historically prosperous fishing port, boasts many restaurants serving delicious seafood dishes, so you won't have trouble finding restaurants like in Niseko.

As mentioned above, I introduced the increasing popularity of real estate in Otaru. However, due to the smaller scale of Otaru City (approximately 120,000 people) compared to larger cities like Sapporo (approximately 2 million people), and the increasing number of investors recognizing the appeal of Otaru, the liquidity of properties seems to be decreasing. If you're interested in finding real estate in Otaru, you may want to consult agents listed on Japan-Property specializing in Hokkaido and patiently wait for good properties to become available.

Apr 3, 2024