Otaru City, which has recently caught the eye of international investors familiar with Hokkaido.

When discussing popular real estate investment areas in Japan among foreign buyers, Hokkaido’s Niseko and Sapporo are frequently highlighted. However, Otaru City, situated between these well-known locations, is also gaining attention. Positioned near the central-western coast of Hokkaido, Otaru is located roughly 40 kilometers northwest of Sapporo and about 60 kilometers northeast of Niseko. The city offers a variety of seasonal activities, including spring hikes, summer beach outings, autumn leaf viewing, and winter skiing, all within a stunning natural setting.

Image : From Sapporo Station

Distance From Otaru to Sapporo and Niseko

Traveling from Otaru to Sapporo takes about 45 minutes by car via the expressway or roughly 30 to 40 minutes by rapid train. Reaching Shin-Chitose Airport, the main air gateway to Hokkaido, requires approximately 75 minutes by rapid train. To get to Niseko, the journey takes between 1 hour 40 minutes to 2 hours by both car and train.

Otaru’s Transformation into a Major Tourist Destination

Once a thriving city, Otaru faced a significant economic downturn after World War II, largely due to a decrease in herring catches and the shift from coal to oil as the primary energy source. Traces of its former glory remain visible in historical sites such as the Otaru Canal and the old warehouse district. Today, Otaru has reinvented itself into a modern area filled with cafes and shops, drawing nearly 8 million visitors each year and establishing itself as a major tourist hub.

Otaru: A City Renowned for Glass Craftsmanship and Sake Brewing

Otaru originally flourished as a fishing town, which spurred the production of glass floats and oil lamps used by fishermen. As the use of glass in fishing waned over time, the city’s glass industry shifted focus and now thrives in the creation of everyday items, interior decorations, and accessories. Presently, there are more than 60 shops in Otaru that craft and sell distinctive glass products, making them highly sought-after souvenirs for tourists.

In addition to its glass industry, Otaru has a rich tradition of sake brewing, thanks to its abundant supply of high-quality water sourced from the surrounding forests and nature. Water, which makes up about 80% of sake's ingredients, is crucial for producing high-quality sake, as it is used throughout the brewing process, from washing the rice to diluting the final product.

Besides sake breweries, Otaru is home to wineries and breweries, and the nearby town of Yoichi hosts the renowned NIKKA WHISKY distillery, founded by Masataka Taketsuru, a key figure in the history of Japanese whiskey. Visitors to the area can enjoy sampling local sake and even participate in factory tours.

Otaru, having experienced both prosperity and decline, has now become a bustling tourist destination.

In recent years, however, it has also quietly garnered interest from international investors, many of whom have already invested in other parts of Hokkaido, such as Sapporo, Niseko, and Furano.

Let’s explore the reasons of the increasing attention toward real estate in Otaru.

1. Easy Access to a Variety of Ski Resorts

   
   

Otaru City is surrounded by numerous ski resorts, offering the opportunity to explore different slopes each day.

2.Potential for High Returns with Vacation Rentals

Like many other regional cities in Japan, Otaru has seen a decline in real estate prices due to population decrease. However, the growing demand for accommodations from both domestic and international tourists makes it possible to achieve high gross yields, potentially around 20%, through vacation rental operations. Additionally, the relatively low property prices allow for more affordable acquisition of a second home in Hokkaido.

3. Upcoming Hokkaido Shinkansen Extension

The Hokkaido Shinkansen, which currently runs as far as Hakodate, is set to extend to Sapporo, with a planned stop in Otaru. The Otaru station is expected to be completed by September 2025, with full Shinkansen service beginning in 2031. This extension will also include a station in Kutchan (Niseko), reducing travel times to Sapporo to 12 minutes and to Niseko to 13 minutes. As transportation becomes more convenient, Otaru’s real estate market is likely to see increased interest.

4. Culinary Delights: Seafood and More

For those who appreciate Japanese seafood, including sushi, Hokkaido offers some of the best in the country. Otaru, with its history as a thriving fishing port, is home to numerous restaurants serving top-quality seafood, making it a food lover's paradise. Unlike Niseko, finding excellent seafood in Otaru is easy and convenient.

As outlined above, real estate in Otaru is gaining popularity. However, due to the smaller size of Otaru City (with a population of around 120,000) compared to larger cities like Sapporo (which has around 2 million people), and the growing number of investors recognizing Otaru's appeal, the availability of properties is becoming more limited.

If you're considering investing in Otaru real estate, it may be wise to consult agents listed on Japan-Property who specialize in Hokkaido and be prepared to wait patiently for the right property to come on the market.