Searching for a Karuizawa Home

Part 1: Motivation — the Why

This will be a short series of what I learned about buying in Karuizawa 軽井沢.

The easy Karuizawa life — Harunire Terrace

I live in Tokyo and I love it here. But I also love getting away from the bustle and into cooler climates (some snow is nice). I was mostly going to Hokkaido 4–5 times a year where I bought a small vacation cottage. It is wonderful, but it is too far. The commute includes getting to Haneda (30min), then flying (1.5hr), then getting to the cottage 2.5hrs away by car. Door to door including waiting time is like 6hrs if you think about it + expense of taxi, flight, car parking etc. Thus I plan to sell in Hokkaido and buy in Karuizawa!

Karuizawa: Top Positives Aspects

1. Accessible: 1hr Shinkansen from Tokyo (1hr3min to be exact) or 2.5hr leisure drive from Tokyo (helicopter service no longer available!)
2. Top restaurants, shopping, activities, and dog friendly places
3. Cool-weather mostly year-round (for now)

Karuizawa: Top Negatives Aspects

1. Very expensive real estate (not quite in a bubble, but rising steadily)
2. Lots of traffic and narrow streets in many areas
3. Too much tourism in peak summer months

Is it an Investment?

In many other countries buying real estate can be thought of as an investment. In Japan it is more like an expense. If you are lucky your land appreciates + and building depreciates and you wind up where you started. In many remote or resort towns you could wind up losing 50% of your “investment” in 15 years.

There are a few exceptions like super-central Tokyo where land values are rising faster than building depreciation and Niseko where SE Asian foreigners’ love of snow has tripled land and property values. I would say Karuizawa is on the borderline with steady land value increases and an acceptance for older remodeled homes.

Nonetheless, it is hard (and unwise) to think of purchasing in Karuizawa nor any resort town as an investment. Folks in Niseko were very lucky. However, if lightning were to strike twice — I would bet on Karuizawa.

Other Reasons

So those are my main reasons — get something closer to Tokyo, and get something that has a shot at increasing in value.

The other aspect is that Karuizawa is really a nice town. Really beautiful, classy, and thus really popular. Inviting friends to Hokkaido is not likely to get takers due to cold and distance, but Karuizawa is close and you can have plenty of visitors (even if you don’t want them!)

It is also a viable retirement zone. Tons of people retire there or spend 1/2 the year in Karuizawa and shuttle back and forth given it is only 1hr away.

Also, while real estate is expensive in Karuizawa — it is still far cheaper than Tokyo. Your 55m JPY ($500k USD) will get you a nice 2br house with land in Karuizawa, as opposed to a tiny 1br condo in Tokyo.