---
title: Aruku-zaka Plan Shifts Towards Private Villas as Niseko Construction Costs Rise
date: 2026-10-17T21:52:00+09:00
author: Chris Pickering
canonical_url: "https://uchijapan.com/news/aruku-zaka-plan-shifts-towards-private-villas-as-niseko-construction-costs-rise"
section: News
---
[Developments](https://uchijapan.com/news/developments)# Aruku-zaka Plan Shifts Towards Private Villas as Niseko Construction Costs Rise

Oct 17, 2026

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   ![Arukuzaka Oct2026](https://d1g90p0r985xbs.cloudfront.net/properties/_480x270_crop_center-center_60_line/442957/ArukuzakaOct2026.jpg)Revised plans for Aruku-zaka Street in central Hirafu propose replacing three first-phase hotel buildings with nine private-villa plots, reducing the size of the plaza area and removing a planned skating rink. The developer attributes the overall reduction in scale to rising construction costs, offering a concrete example of how the economics of building in Niseko are reshaping projects before they reach construction.

The proposals follow [Metropoly Holdings’ July announcement](https://uchijapan.com/news/metropoly-announces-refreshed-masterplan-for-arukuzaka-street) that it was refreshing the long-delayed development’s masterplan. At that stage, the company outlined its intention to reduce density while retaining a mix of retail and residential uses. Documents now released for public briefings explain what that would mean across the approximately 2.83-hectare site.

The revised first phase would comprise nine plots intended for private holiday homes, replacing the three substantial hotel buildings previously proposed beside the town road. A shared internal access road would serve the plots through a single connection to the town road. The developer says this arrangement, together with the change in use, would significantly reduce the burden on that road.

Hotels remain part of the wider scheme. The revised plan divides the development into three areas: the private-villa plots, a plaza area containing shops, condominiums and hotel uses across two plots, and a separate hotel area comprising three plots in the centre of the site. The change is therefore a reworking of the development’s mix and sequence, rather than a complete move away from visitor accommodation.

The plaza area would shrink from approximately 1.1 hectares to 0.7 hectares, with a corresponding reduction in the scale of its buildings. The skating rink included in the earlier proposal would be removed. The developer also says the revised layout would increase the combined area of retained woodland and designated green space by around 1,500 square metres, or approximately 30%.

The explanation accompanying the plans traces the project’s difficulties back to its earlier design. Initial development permission was obtained in 2018, but costs exceeded expectations, prompting changes that received permission in 2020. The pandemic then created further uncertainty. According to the developer, renewed work on the project from 2025 found that construction costs had risen further, including through more expensive building materials, leading to the latest reduction in both earthworks and building scale.

For property buyers and owners, this is the most revealing part of the announcement. An attractive location does not remove the need for a development to work at today’s construction prices. Aruku-zaka illustrates how a project can retain its site and broad purpose while changing the type and timing of the property it proposes to deliver.

One interpretation is that beginning with residential plots could allow investment to be spread across smaller, separately delivered properties, rather than requiring three substantial hotels in the first phase. That is a potential advantage of the revised structure, rather than a financing strategy confirmed by the developer. Roads, retaining walls and other shared infrastructure would still need to be provided, and the documents do not establish the project’s funding arrangements.

For Hirafu, the implications extend beyond the individual properties. The smaller plaza and removal of the skating rink would reduce the scale of the commercial and leisure offer envisaged in the earlier plan. Private holiday homes would also bring a different pattern of use from hotels, although their eventual contribution to local spending and activity would depend on how frequently they are occupied and how the remaining commercial facilities develop.

There are potential benefits alongside those compromises. The developer expects less pressure on the town road, while the increased provision for woodland and green space could help soften the development’s relationship with its surroundings. The eventual contribution to village life will depend particularly on the design and delivery of the remaining plaza, shops and accommodation.

The proposed programme begins in May 2027, with first-phase completion targeted for June 2029, the second phase for October 2031 and the third for July 2034. These are proposed development milestones, not confirmed hotel opening dates. The latest documents describe a proposed amendment to the existing scheme; they do not establish that the revised plan has been approved or that construction has begun.

Public briefings are scheduled for Monday 19 October 2026 at 13:30 JST and Friday 30 October at 13:00 JST, both at Kutchan’s Small and Medium-sized Enterprise Centre hall, at 32 Minami 2-jo Nishi 1-chome. Kutchan Town says the same information will be presented at both sessions.

Aruku-zaka’s revised proposal gives a clearer picture of how one central Hirafu site could develop, but also of the choices facing Niseko’s developers. Rising costs are affecting more than project budgets: they are changing the balance between private homes, visitor accommodation and the facilities available to the wider village.