After 18 months of living in Karuizawa, a resort town about an hour away from Tokyo via the Shinkansen, I have bought a house here. This article describes my experience of purchasing a house, and contains tips that are useful both if you’re considering buying in Karuizawa specifically, and in Japan more generally.
In this article, I’ll cover:
- My personal journey to Karuizawa
- Why you might choose to live in Karuizawa
- My process of buying a house
- Tips for potential homebuyers in Japan
From Tokyo to Karuizawa: my own journey
In April 2020 I was living in central Tokyo. Three days after my one-year-old son entered daycare, a state of emergency was declared because of COVID-19. The daycare was closed, so my wife and I took turns looking after him while working remotely from our apartment.
The small park next to our apartment was also closed due to the state of emergency, and so my time with my son included such fun activities as walking up and down the stairs, and looking at ants in the parking lot.
After a week or two, we’d had enough. We moved in with my in-laws, who were living in a house in a small commuter town in Saitama. Our lives improved dramatically. The nearby parks were not closed. The grandparents could help look after my son. I could enjoy excellent cycling in the nearby mountains.
We kept our apartment in Tokyo, as we didn’t know how long we’d stay, but let my brother-in-law use it. It was more spacious than his own, and gave him a better place to work remotely from.
Leaving Tokyo for good
In June of 2020 the state of emergency was lifted, yet we decided not to move back to Tokyo. Before having a kid, Tokyo had been a wonderful place to live. There was always something new to try, and opportunities to make new professional connections abounded.
But as a father, my lifestyle had changed dramatically, even before COVID. No longer was I attending multiple events per week, but at most one per month. I basically stopped drinking alcohol, as maximizing the quality of what little sleep I could get was too important. With a stroller, getting around by train was no longer easy. My life had become much more routine: excitement came from watching my son grow, not my own activities.
Though we’d enjoyed living in an area that was suburban bordering on rural, we didn’t want to live with my in-laws indefinitely. Still, seeing how useful it was to have them around with a small child, we decided to look for a house to rent nearby.
We found a relatively modern one in the next town over, about a 10-minute drive from my in-laws. The rent was about half of what our Tokyo apartment’s had been, yet this house was twice as big, and even had a small garden.
Living there was a wonderful change of pace. When my second child was born a year later, having the in-laws nearby became even more helpful. But as the COVID restrictions began rolling back, we started to think about where we wanted to settle down permanently.
Choosing Karuizawa
There were some definite downsides to the town we were living in. Practically all our neighbours were retirees. There were few restaurants that were worth going to. The equipment at the playgrounds was falling apart, and there was no sign it would be replaced. The summers were brutally hot, making it unpleasant to be outside. There wasn’t anything for kids to do inside.
We’d visited Karuizawa before, and it seemed like it had the access to nature we appreciated, while also offering more options for dining out and other cultural activities. The cooler climate was also a big motivating factor.
So in June 2022, we started looking at places. Most of the rental options were incredibly expensive seasonal properties, and so buying a house seemed like the most realistic option. But the market moved extremely quickly, and any property that seemed like a good deal was snatched up before we even had a chance to look at it. After about half a year of searching, we gave up.
We then considered buying a house in Gotenba, a town at the base of Mount Fuji. We’d visited there in the past, and though it didn’t seem quite as nice an option as Karuizawa, we were able to find a decent house that was cheap enough that buying it was a relatively small risk. We placed a lowball offer on the property, and were rejected.
Frustrated, I took a look at the rental options for Karuizawa again. This time we saw two houses for rent that were good candidates! We heard from the real estate agent that one of the properties already had someone coming to view the next afternoon, and so we went the next morning.
Visiting the house, it seemed like exactly what we were looking for. We immediately put in a rental application, and moved in the next month.
Why Karuizawa?
I’ve already covered some of the reasons why we chose Karuizawa, but I’ll go into more detail about them, along with other unexpected good points.
Mild summers
According to historical data, the average temperature in Karuizawa in August is 20.8°C. While daytime temperatures get hotter than that, you’re unlikely to risk heat stroke by being active outside, something that isn’t true for much of Japan.
That being said, climate change is inescapable, and summers in Karuizawa are getting hotter than historical data would suggest. This is an issue because while it cools down at night, many of the houses are built only with the cold winters in mind. For instance, despite the house I rented being built in 2019, it only had a single AC unit. This meant that many days in July and August were unbearably hot inside, and I had trouble sleeping at night as it wouldn’t cool down until well past midnight.
Cold but cheerful winters
While summers are cooler, this also means winters are cold. The average temperature in January is -3.3°C. However, much like Tokyo, winters here tend to be quite sunny, and there have only been a few heavy snowfalls per year while I’ve lived here. That’s enough that you can enjoy the snow without having to worry about shovelling it daily.
Proximity to Tokyo
The Shinkansen makes it quicker for me to get into central Tokyo than when I was living in suburban Saitama. It’s about a 70-minute ride from Karuizawa station to Tokyo station. While this is not something I’d want to do daily, I now typically go into Tokyo only a couple of times per month, which is reasonable.
Greenery and nature
As a resort community, Karuizawa places a lot of emphasis on greenery. Throughout the town, there are plenty of areas where residential and commercial spaces mingle with forest. Many houses have nice gardens. Shade exists everywhere.
Wilder nature is close by, too. While you can do day hikes from Tokyo, they involve an hour plus on the train, followed by a climb where you’re usually surrounded by other people. In Karuizawa, I can walk 15 minutes to a trailhead where I’ll see at most a couple of groups per hour.
Cheaper than Tokyo, but not significantly so
Money spent on housing goes a lot further in Karuizawa than in Tokyo. For the same price as a used Tokyo apartment, you can get a nice used house on a relatively large plot of land in Karuizawa.
However, it’s hard to find truly affordable housing. For starters, Karuizawa’s plots tend to be large by Japanese standards, so even if the per-unit price of the land is cheaper, the overall cost isn’t so cheap. For instance, a centrally located 100 tsubo (330 m²) plot in Nakakaruizawa, which is on the small side of what you can find, will currently sell for at least 30 million yen. It may be possible to get a deal on a more remote piece of land, but true steals are hard to come by.
Dining out is another area where it’s easy to spend lots of money. Prices are on par with Tokyo, and there are few cheap options, with Sukiya, McDonald’s, and a couple of ramen shops being practically the only sub-1,000 yen choices.
Groceries, at least, are cheaper. While the Tsuruya grocery store does sell a lot of high-end items, the basics like milk, eggs, vegetables, and chicken are significantly cheaper than in Tokyo or even suburban Saitama.
All this means that many residents of Karuizawa are wealthy compared to Japan’s overall population. Sometimes that makes them take for granted that others might struggle financially. For instance, when my son graduated from public daycare, the PTA organized a graduation party. We paid 16,000 yen for myself, my wife, and two children to attend. Since that’s equivalent to two eight-hour days at minimum wage, I think it was too expensive. I noticed that some of the children didn’t attend, while others came with just one parent, perhaps because of the prohibitive cost.
Liquid housing market
While we were living in suburban Saitama, we considered buying a house, and even looked at a couple of places. It was very affordable, with even mansions (in the traditional English usage of the word) being cheaper than Tokyo mansions (in the Japanese sense). But the reason they were so cheap was because there wasn’t a secondary market for them. So even if we could get a good deal, we were worried that should we ever want to sell it again, it might not even be possible to give it away.
Karuizawa’s real estate market moves fast. This sucks as a buyer but is great for sellers. Furthermore, because it’s perceived as a place to have a second home by wealthy Tokyoites, houses that are by our standards very nice are nowhere near the top of the market. This reduces the risk of buying a property and not being able to sell it later.
Great public facilities
If you have young children, Karuizawa offers many free or cheap public facilities. This includes nice playgrounds, children’s halls stocked with toys and activities, a beautiful library with a decent selection of English picture books, and a recreation centre with a gym, training room, pool, indoor and outdoor skating rinks, and a curling rink (built for 1998 Winter Olympics).
A welcoming and international community
Some areas of Japan have a reputation for being insular and not friendly toward newcomers. Perhaps because much of Karuizawa’s population has moved here from elsewhere, the people I’ve met have been quite welcoming. I’m also always happy to meet new residents, and pass on the helpful tips I’ve picked up.
In addition, I’ve discovered that many residents have some sort of international background. While non-Japanese residents are very much the minority, a large percentage of the Japanese parents I’ve spoken with have either studied or worked abroad.
There is also an International Association of Karuizawa, whose members include many long-term non-Japanese residents. Their Facebook group makes it easy to ask for advice in English.
You can get around without a car
Most days I don’t use a car, and get around by walking or bicycling. The lack of heavy snow makes it possible to do this year round (though I’m one of the few people who still uses a bicycle when it is -10°C out).
Mostly I’m able to get around without a car because I live in a relatively central area, so it’s not feasible for every resident. It can be quite helpful, though, as traffic becomes absolutely horrible during the peak seasons. For instance, the house I was renting was a kilometer away from the one I bought. It was less than a 5-minute drive normally, but during Golden Week it took 30 minutes.
That being said, it’s practically required to use a car sometimes. For instance, there’s a great pediatrician, but they’re only accessible by car. Similarly, I use our car to take my kids to the pool, pick up things from the home centre, and so on.
My process for buying a house
After a year of renting in Karuizawa, we decided we wanted to continue living there indefinitely. Continuing to rent the same house wasn’t an option: the owners were temporarily abroad and so we had a fixed-term contract. While we could have looked for another place to rent, we figured we’d be settling down, and so wanted to buy a house.
Starting the search
On September 1st, 2024, we started our search and immediately found our first candidate: a recently-built house near Asama Fureai Park. That park is the nicest one for young children in Karuizawa, as it has a good playground but is never too crowded. The property was listed with Royal Resort, which has the most listings for Karuizawa.
Rather than contacting Royal Resort directly, though, we asked Masaru Takeyama of Resort Innovation to do so on our behalf. In Japan, there is a buyer’s agent and seller’s agent. Often the seller’s agent wants to act as the buyer’s agent as well, as it earns them double the commission, despite the obvious conflicts of interest. Of the agents we’d contacted previously, Masaru seemed the most trustworthy. I may have also been a bit biased, as he speaks English, whereas the other agents only spoke Japanese.
He set up a viewing for us, but we discovered it wasn’t quite our ideal house. While the house was well built, the layout wasn’t our preference. It also was on a road with many large, noisy trucks, so it was kind of unpleasant to be outside.
Making the first offer
Over the next three months, we’d look at new listings online practically every day. I set up automated alerts for when the websites of different real estate agents were updated. We considered dozens of properties, and actually visited four plots and three used houses. None of them were a good match.
On December 3rd, 2024, I found a great-looking property. It was being advertised as 5.1 km from Nakakaruiza station, which would have made it inconvenient, but it was also listed as 中部小学校近隣戸建 (Chubu Elementary Neighborhood Detached House). As the elementary school isn’t that far from the station, I assumed there was an error. The “house” was more of an old cabin, but it was priced cheaply for just the land itself. I sent Masaru an email asking him to give us the address.
Meanwhile, my wife and I had gotten pretty good at identifying the locations of properties based on clues in the listing. The startup of a fellow Karuizawa international resident has a good tool for searching lots. My wife managed to identify this one, and so the following morning we looked at it. It wasn’t perfect, but it was a great location and a good deal, so before Masaru had even responded to us with the address, we sent another email saying we’d like to buy it.
Masaru responded later that morning that he had a concern: the access to the house was a private road divided into two parcels, one owned by a real estate company, and the other by a pair of individuals. We’d need to negotiate with those parties about things like usage rights, waterworks, and so on. While he wasn’t worried about dealing with the real estate company, as it should just be a question of compensating them, the individuals owning the other parcel might theoretically be unwilling to negotiate.
Based on his analysis, the following day (December 5th) we submitted a non-binding purchase application, with the condition that the road issue be resolved. That evening Masaru told us that he had discovered that the seller was a woman in her nineties. Because things like dementia are common among people that old, he added another condition, which was that a judicial scrivener testify to her mental capacity to enter into a contract. He warned that if we didn’t do that, and later the seller was to be found to be mentally unfit, the sale could be reversed, even if we had already proceeded with the construction of a new house. Given the cost of building a new home, this seemed like a prudent measure to take.
A few days later we heard that the seller’s son was discussing the sale with his mother, and that they’d be having a family meeting the following weekend to decide whether to make the sale. To try to encourage them to sell to us, my wife wrote a letter (in Japanese) to them, and attached some photos of our family in Karuizawa.
On December 16th, we received word that there was actually another potential buyer for the property who’d made an identical offer. In Japan, once someone submits a purchase application, it is normally handled on a first-come, first-served basis. However I noted that the seller didn’t mark the property as “under negotiation” on their website. I suspect we were the first to make an offer, as we did it literally the day after it was published.
Apparently the seller’s son wanted to do business with us, but the daughter preferred the other family. We were not told why the daughter wanted to go with the other potential buyers, but it may have been because of our request to have the seller’s mental capacity tested. Dropping that requirement seemed too risky, though. On December 18th, we were informed that the seller had chosen the other buyer.
This was quite a disappointing turn of events. We’d initially thought it was a sure thing because we were so fast to submit the offer and were giving them what they’d asked for. We’d even talked with a couple of home builders already.
Furthermore, as winter had arrived, it seemed like the real estate market had also frozen. Whereas we’d previously seen new properties appear almost daily, now we spotted one or two a week at most.
Making a successful offer
Over the holidays, we looked at a couple more plots. On January 6th, we identified a used house in Nakakaruizawa that seemed to meet our criteria. It was by no means perfect, but close enough to be a candidate, so on January 10th we visited it. The house was pretty much as expected.
Our one concern was the heating situation. It had previously had central heating that was based on a kerosene boiler, but that had been replaced with central air conditioning. While visiting the house, we turned it on, but it didn’t seem to make much difference.
After some back and forth, we got the seller to run the AC constantly for a couple of days, and then on the morning of January 14th, we visited the house again. It was a grey and cold day, with little sunlight—basically the worst conditions possible for keeping the house warm, which I suppose was a good test. It was about 1°C outside and 10°C inside. We heard that the house had previously been rented out, and that the prior tenants had needed to use extra kerosene heaters to stay warm.
This wasn’t ideal, but we also saw that with some renovations, we could improve the insulation. We considered making a lowball offer, but Masaru thought it was unlikely that it would be accepted. Instead, on January 17th, we made an offer at the asking price, conditional on it passing a home inspection and us getting an estimate for renovation costs.
We heard that, once again, there was another potential buyer. They were “preparing” to submit an offer, but hadn’t done so yet. This time, the seller followed the standard process of considering our offer first, and accepting it in a non-binding manner.
We learned that the seller itself was also a real estate company, whose main business seemed to be developing hotels and golf courses. The sale of this property was a relatively minor deal for them, and their main concern was that everything went smoothly.
On January 23rd, we had a housing inspection carried out. The inspector found several issues, but they were all cosmetic or otherwise minor, so we said we’d proceed with the contract.
Signing the contract
The seller’s agent didn’t appear to be in a hurry to finalize the contract. It took a while for them to present us with the paperwork, and after that there were some minor changes to it, so it wasn’t until March 19th that we finally signed.
One reason for the delay was that we’d suggested we sign the contract electronically, something the buyer had never done before. Signing a contract electronically was not only simpler from our perspective, but also avoided the need to affix a revenue stamp on the contract, saving some money. But even though Masaru was experienced with electronic contracts, it seemed to take the seller some time to confirm that everything was okay.
When we signed the contract, we agreed to immediately make a 10 percent down payment, with the outstanding amount to be transferred by May 16th. We’d already gotten pre-approval on a housing loan, but needed the extra time for the final approval.
Obtaining the loan
On January 22nd, we visited Hachijuni Bank, which is headquartered in Nagano and has a branch in Karuizawa, and started the loan pre-approval process. This involved submitting a fair amount of paperwork, especially as I was the director of a company as opposed to a regular employee. The whole process took about two weeks.
In parallel, we started the pre-approval process for PayPay Bank. The application involved minimal paperwork, and we were able to quickly get pre-approved by them too.
To receive the actual approval for the loan, though, we needed to have already signed the purchase contract, so we couldn’t begin until March 19th. This time, the situation was reversed, and PayPay Bank required much more documentation than Hachijuni Bank.
On April 9th, we met again with Hachijuni Bank. There was a problem with our application: my middle names hadn’t been properly entered into the contract, and so we’d have to go through the approval process again. The representative said he’d make sure they reviewed it quickly because it was his fault.
That evening, we got the result of our application to PayPay Bank: rejected! No reason was given, but as they offer quite low rates, I’m guessing they only accept the lowest-risk loans. Maybe the reason was the house itself, maybe it was that I was the director of a small private company, maybe it was something else. While the Hachijuni Bank representative seemed positive about our application, I was worried.
On April 15th we got the result from Hachijuni Bank: approved! Two days later we signed the paperwork with the bank and scheduled the handover for April 30th.
Toilet troubles
When the previous tenants had moved out of the house, the seller had decided to drain the water. Karuizawa temperatures are cold enough that if the house isn’t being heated, the pipes can freeze and burst. This meant that when we had the housing inspection performed, the inspector couldn’t confirm anything about the plumbing.
Given that by mid-April temperatures were no longer below zero, we asked that the seller put the water back in. They agreed, and on April 23rd we heard that there was a problem with the toilets—some sort of leak. Likely some of the rubber sealing had dried out while the water had been removed.
The seller offered to replace the toilets or pay us the cost of replacing them with equivalent ones. My understanding was that because they hadn’t declared any issues with the toilets in the original purchase agreement, they were obligated to do so.
My wife and I had already talked about upgrading the toilets, but I wasn’t convinced that it’d be worth it. With the seller offering to pay two-thirds of the cost of the more premium toilets we wanted, though, it seemed like a stroke of luck.
Handover
On April 30th, the handover went smoothly. A representative from the seller’s company met with myself, the real estate agents, and a judicial scrivener. Technically I didn’t need to be there for it, but as the representative had come from Hiroshima I thought I should be present just in case anything happened. Nothing went awry, however, and they gave me the keys and some omiyage.
Renovations
We had already decided to do some renovations before moving in. With the toilets not working, that became an immediate necessity.
One of the challenges of buying a used house is deciding how extensively to renovate. We settled on doing the minimum: replacing the toilets, putting up a wall to split the kids’ bedroom in two (it already had two separate doors and was designed to be split), switching the lights in the bedroom from fluorescent tubes to LEDs, and adding inner windows (内窓, uchi mado) to improve the insulation.
We’d kicked off the process shortly after completing the home inspection, and had already had contractors visit to give estimates in advance. Still, we weren’t able to finalize any plans until we’d decided the exact handover date.
After some negotiating, we got an agreement to wrap up the renovations by the beginning of June, and set a move-in date of June 5th.
Moving in
We managed to move in as scheduled, almost half a year after we first saw the house, and 10 months after we began our initial search. We weren’t exactly in a rush with the whole process, but it did take a lot of our time.
Tips for potential homebuyers in Japan
Here’s what I’d recommend if you’re looking to buy a house in Japan.
Don’t rely on real estate agents to find properties for you
My impression of real estate agents in Karuizawa is that they’re quite passive. I think this is a combination of the market being hot, and the fact that many inquiries they get are from people who dream about living here but will never make it a reality.
I’d suggest being proactive about the search yourself. All of the best properties we found because we discovered the listings ourselves, not because an agent sent them to us.
Find an agent you can trust
The main value I got out of using a real estate agent was not because he introduced specific properties, but because he could point out potential issues with them. Checking the ownership of the road leading up to the property, or whether a contract could be reversed if the signer was years later deemed to be mentally incompetent, weren’t issues that had ever even occurred to me.
Every property I considered purchasing had some unapparent problems. While there are some legal obligations placed upon the buyer’s agent, my understanding is that those don’t extend to every possible situation. What’s more, real estate seems to attract unscrupulous people, and some agents aren’t averse to behaving unethically or even illegally if it helps them close more deals.
Because of this, I think the most important quality in an agent is trustworthiness. That can be hard to evaluate, but go with your gut.
You don’t need your company to be profitable three years in a row
I’d previously heard that it’s challenging to get a loan as the director of a company, and that the last three years of a business needed to be profitable to receive approval. That made me apprehensive, as TokyoDev was only incorporated in 2022, and 2024 was an unprofitable year for us due to it being the first year we had a decrease in the number of hires.
However, when Hachijuni Bank reviewed TokyoDev’s finances, they said it was a great business. I was the sole employee of the business and it was only unprofitable because I had set my director’s compensation too aggressively. We’d had previous profitable years, and the company didn’t have any debts.
In other words, one bad year for your company isn’t going to tank your chances of getting a loan.
Go through the final approval process with multiple banks
Some will advise you not to go through the final approval process of multiple banks at the same time. Since there’s a central database that allows banks to see that you’re doing this, it apparently increases your risk of rejection. If you’re only applying at a few banks, though, the risk remains fairly low.
I guess PayPay Bank theoretically could have rejected us for this reason, but I doubt it. If we had initially applied only with them, however, and had waited to be rejected before applying with Hachijuni Bank, we would have risked not having the final approval go through before the payment deadline.
Get a housing inspection
If you’re buying a used house of any significant value, I highly recommend getting an inspection. We used Sakura Home Inspection, the biggest inspection company in Japan. While the base price for the inspection was only 66,000 yen, we ended up paying about 240,000 yen due to additional options, the size of the house, and transportation fees. While that’s not exactly cheap, it was less than one percent of the total purchase price, and seemed worth it to mitigate the risk of serious issues that might appear after the purchase.
Rent locally before buying
Our plan of first renting, then buying worked out quite well for us. Not only did it give me confidence that Karuizawa was somewhere I wanted to live for the long haul, it was much easier visiting potential properties when I lived a 10-minute bicycle ride away from them, instead of a 3-hour drive.
If you’re considering buying a house in Karuizawa…
Please get in touch with me! I’m happy to answer any questions you might have. In my previous article on coworking spaces in Karuizawa, I invited people to get in touch, and already have made several new connections through it. I’d love to continue to grow my community, and help transform Karuizawa from a resort town to one that’s focused on its full-time residents.
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