The upscale summer resort area of Karuizawa in Nagano Prefecture is seeing its property market rebound as a growing number of older residents from greater Tokyo are move in. In 2015 the extension of the bullet train line will connect Karuizawa with the Hokuriku region, making the area an even more convenient destination.
While the rest of the prefecture is still dealing with sluggish land values, the increase in demand for vacation homes in Karuizawa has started to push land prices upwards.
The town approved 338 holiday homes in 2013, up 9% from the year before.
Many of the buyers in Karuizawa are seniors from the Tokyo area who are looking for a permanent home. A local agent reported that 90% of their clients were looking to live in the town full-time after retirement.
The extension of the Shinkansen line is also helping with the town’s revival with new buyers coming from Ishikawa and Toyama Prefectures.
The most popular area in Karuizawa is Minamihara. Following the Lehman Shock, land prices dropped to 30,000 Yen/sqm, but land is now selling for around 42,000 Yen/sqm in 2014. Despite the Minamihara and Minamigaoka neighbourhoods having a large number of luxurious holiday homes, they are sold almost as soon as they are put on the market. The most popular homes are on blocks of land around 990 sqm and priced between 40 ~ 50 million Yen. One agent remarked that property prices did not seem to be increasing and some homes were sold at a discount, but buyers are anticipating prices to rise in the future.
Karuizawa has been attracting expats and Japanese since the 1910s. It is 68 minutes by Shinkansen from Tokyo and is a popular spot for wealthy Tokyo-ites to have summer holiday homes or weekenders. John Lennon and Yoko Ono used to stay in Karuizawa every summer. It is also rumoured that Bill Gates is building a mega-mansion in the town, although it has not been confirmed.
Source: The Nikkei Shimbun, February 27, 2014.