In my previous post, I wrote the number of Tokyo commuters from the town is growing. Today, I like to show you the town itself is also growing.
The graph at the left shows the growth in town population and house building statistics for last 5 years. The number itself is small at 19,657 in 2014; however, it should also be remarked that Karuizawa achieved more than 14% growth in population for last 10 years (it was 17,173 in 2005). This fact is regarded very phenomenal in recent trend of population shrink in this country.
When you look at that number in comparison to the house building statistics, you will find another fact. The number of newly built permanent residence is 129 and that of seasonal villas and cottages is 338 in 2013, something which make total of 467 house constructions. This takes roughly 2.4% of town population. I studied the similar ratio in Tokyo metropolitan and Nagano prefecture. Tokyo is roughly 0.4% while Nagano is 0.5%. You will see how actively people are flowing in, and having their house in the area.
As people are flowing in, local real estate market is picking up. Even after the Abenomics economic policy reform was implemented in 2013, generally speaking, Japanese local areas outside three major metropolitan areas of Tokyo, Osaka, Nagoya, are still seeing a problem in their local economy recovery. Land transactions have not picked up, and land prices have been going down for these couple of years.
However, in Karuizawa, the trend seems to follow that of those metropolitan areas. Land prices started to pick up in 2013 as the steady growth in land transactions continues. In 2015, only Karuizawa shows positive annual growth of 1.6% in land price index for residential areas among all the municipalities in Nagano prefecture. The same index for overall Nagano prefecture was -1.8%, and it was 1.3% in Tokyo, 2.0% in Nagoya, and -0.1% in Osaka. You can see how actively and quickly people are starting to spend and invest their money in the real estate here, as national economy is picking up.
I took a quick look at those trends in other Japanese famous resort areas, like Niseko, Nasu, Hakone, Okinawa, etc. Okinawa seems to follow the similar trend with the one in Karuizawa, but other areas seem to be still struggling.
Besides the economy, Karuizawa real estate has another important risk of Mount Asama eruption. In 2008 and 2009, Mt. Asama erupted and then the local house construction and real estate indices went down by a couple of percents. This year, Mt. Asama is observed to start pluming actively again. We should carefully watch it, but I hope nothing serious would happen.