Karuizawa’s Many Burrows
Part 2: Where can I afford to buy in Karuizawa? 軽井沢
I didn’t realize how many areas there are in Karuizawa, and how different each is. The town is actually not that large, driving from end to end is 15 min with some light traffic. But the areas feel different and have micro-climates (Kyu-Karuizawa is in a valley and humidity pockets, higher in hills are cooler, etc). Everyone has an opinion on which area is best.
Kyu-Karuizawa (old Karuizawa):
The first area I looked at was Kyu-Karuizawa, because it is the old town, the center of Karuizawa-universe, and a friend had a family villa up by Manpei hotel.
I went to look at the villa which was on sale for only 15m JPY and learned a few things:
- Things are cheap because they are not in demand
- Much of Karuizawa is on poor roads and the land is on very steep slopes
- Many old houses are in need of serious renovation (like 10-20m+)
The prime real estate in old Karuizawa starts at 100m+ JPY ($1m USD), with nice properties in the $3m range and above. Having looked at Niseko alot, I’m not shocked by these multi-million dollar homes, but for some reason, I thought Karuizawa was a bit more affordable. I guess not!
Almost in walking distance was a nice villa area called Mikasa Village. I was contemplating this “American House” which had a nice view on a ledge.
I was close to bidding on this American House at 49m JPY ($450k USD). The pro/con:
- + Great Southern view and beautiful sunset
- + Nice well built “American style” house
- - Horrible road access — gravel uneven road up steep hills, with limited parking
- - 30min walk up/down the steep slope to any shops
- - Landslide risk zone (modest, but exists on any slope)
In the end, I decided poor accessibility was the killer. I wanted a place I could walk to/from and imagined driving on these shotty roads would annoy the heck out of me. I also thought — view is great, but is all that sun exposure without tree cover a problem?
The other observation is how many derelict houses there are in a resort villa even one as popular as Karuizawa. While many are grand, most are empty, and several are dilapidated. It made me wonder how many are akiya… most of these were built in the bubble (80’s). Read about dying resort towns like Yuzawa to understand the downside risk.
Ogura no Sato
South of Naka-Karuizawa station, I found a very pleasant villa area that locals tell me has been around for 50yrs and is fortunate to have a recent spurt of development including a farmers market, Olympic rec center, and a fancy high school. A nice new house was just being built that caught my eye.
It was not finished but priced at 54m JPY ($500k) — pro/cons:
- + Quiet area with well paved roads and low traffic area, and 20min walk to a farmers market, cafe, a gym and large park
- + New house and single-story conveniences
- + Good yard area for a dog run if I wanted to fence it off
- - This house was below street level, hence poses some flooding risk and no view
- - Suspect if these new cheap builds are well made or not — something tells me they are built with poor insulation, etc (common problem in Japan)
In the end, I was too late and someone else bought it! But the fact it was below street level bothered me enough and I am happy to have let it pass. I still think this Ogura no Sato area is a nice area to buy or build a house in. Perhaps worth buying land as an investment.
Sengataki West
Supposedly Bill Gates has built a mansion in this area. On Google Photos it appears to be a mega-sized compound with its own helipad. One has to wonder if it is Gates or another Billionaire — why buy in any town when you plan to build a town inside the town?
This villa area is rather vast, but it has a few key advantages. First, of course, is being close to Bill Gates, second is relatively flat land which I learned is rare in Karuizawa, and finally large estates of 1,000 sqm typically per block.
In the first weeks of my search, I was shown a house for 59m JPY in this area which turned out to be probably the best house I saw over the months I searched. Large, with flat land for my dog run and in great shape for a 20yr old house.
The only negative was not walkable to anywhere. Probably a 30min hilly walk to the cafe zone. Still I think this was the one — it was on the market a week and I actually had no chance to even bid on it. Goes to show the good stuff goes fast!
NakaKaruizawa — 三井の森 and Hoshino
One of the big tourist attractions in this area is Harunire Terrace, a beautiful development by Hoshino Resorts comprised of a dozen or so cafes, restaurants, and shops along the river. There is also a Hoshino resort hotel and a few onsens, making it a great tourist zone.
A thought in my mind was “I want to live within walking distance to this area” — even though it's a tourist area and may bug me in a few seasons of living near the mayhem.
Mitsui Corp built a villa area nearby called Mitsui-no-Mori. I saw what appeared to be some great land, 15min walk to Harurine Terrace and jumped to see it. What I found however is that most of the land is a severely sloped jungle and when I asked a developer about building a house there they quoted me $200k+ in land prep costs to flatten parts with retaining walls, cut trees, build a driveway, etc. Land prep costs are unusually high in Japan. After that, I decided to avoid sloped land.
Later I found this property in the Hoshino Villa Area, a property that is a mere 5 min from Harunire Terrace and 1 min from the Tombo Onsen!
The catch with the house? Well it's 30yrs old meaning the book value of the house is 0 but more so it has a huge semi-natural pond covering 1/2 the property. Still, it has an interesting pro/con:
- + 1 min to Tombo, 6 min to Harurine Terrace and bus lines, can’t beat that
- + Large property and a pond is nice if it doesn’t overflow
- - Pond can be a money pit and may not be fillable if natural
- - Traffic and street noise may be bothersome
- - 30yr house means 10m-20m+ in renovation to make it liveable
This house just came out, and if one would learn from past mistakes if you want it, buy it quickly. One more note, microclimate-wise, locals all say this area is a lot less humid than Kyu-Karuizawa.
Below Sengataki West
I’m not sure of the name of the area, but just west of NakaKaruizawa and south of Sengataki West was a nice little development with a new house perched on a mini hill. The land was only 600 sqm, and the house 130 over 2 floors but it was another “maybe” idea.
Again I ponder if new developers flipping out builds are making quality or not. This house at 52m with the amount of retaining wall and land prep was probably a steal. I learned from home builders that a 100–120sqm house will cost you:
- 30m JPY for the house itself
- 4–5m JPY in taxes and registration fees
- 3-5m JPY in land prep and driveway, landscaping for flat land
- 2–3m JPY for heating + more for a wood stove
- 2–3m for skeptic tank (Karuizawa is mostly non-sewer)
- 3–5m getting nickeled and dimed on various options
So in the end, it's hard to build a house for 50m not even including the land! The negatives I had with this was being a good 20min to the closest combini and further to cafes/restaurants. Also part of the access was a 1-way road which can be annoying. Hmm… maybe not that negative when I think about it again! Overall nice house!
Honorable Mention Areas
The two major areas I looked at were Naka-Karuizawa and Kyu-Karuizawa because I am a tourist like most people and only focused on central tourist areas. I was advised by many to look at Oiwake to the west as a fast-growing area, and areas to the south like New Lake Town (new by Karuizawa standards, but not really new).
In the end, I think it all depends on how much traffic you want, how close to what shops, and what you’re after.
When it comes to real estate, you can never get everything you want (unless you are Bill Gates). My top criteria:
- Walk to places
- Space for a dog run
- Have a view
And runner up (actually my priorities are jacked up because it should be #1) — retain value or go up in value. In that respect, you know what they say about real estate: location location location.
Happy hunting!
