A Three-Bedroom House Outside Nagano, Japan
$2.55 MILLION (280 MILLION JAPANESE YEN)
This contemporary three-bedroom villa sits on a wooded lot in the world-renowned ski village of Hakuba, outside the city of Nagano, in central Japan.
The 2,817-square-foot wood house, known as Villa El Cielo, was finished in 2018 with a multi-angled roof accommodating a vaulted 17-foot ceiling in the living room, a loft above one of the bedrooms and “two drying rooms for skis,” said Yukiko Takano, manager for International Services at List Sotheby’s International Realty, which has the listing.
A paved driveway turns to a stop by a front door bracketed by sidelights. A slim white “rock face” wall to the right of the door continues through a broad front-to-back hallway and outside past a wall of glass in the rear. Western red cedar covers the home’s other hallway and most of the interior spaces, with black wood accents. Floors are oak throughout.
The entertaining spaces have an open floor plan. A wood-burning stone fireplace rises to the ceiling at the juncture of the kitchen, living and dining rooms. The rear deck is entered through doors from the living and dining areas, as well as a family room beyond. A window seat with gray cushions matching a sectional sofa stretches beneath double-story picture windows with views to a wood deck and the forest. The house is being sold furnished.
Between the living and dining rooms, the C-shaped kitchen has black wood cabinets and gray granite countertops with a breakfast bar.
At the front of the house, the en suite master bedroom has a marble-topped vanity and shower. To the right of the entry hall are two other bedrooms. One has an exposed stone wall and a spiral staircase up to a loft. Both rooms open to the deck and share a bathroom with a shower, dual vanities and a washer/dryer.
The village of Hakuba, with about 9,000 residents, hosted several events during the 1998 Nagano Winter Olympics. This property is within walking distance of the Happo-one ski resort, with the nearest ski lift less than 500 feet away. It is also a short walk to some of Hakuba’s bars and restaurants.
The Japanese capital of Tokyo and its international airport are 175 miles southeast, reachable via a three-hour train ride, a seven-hour drive or a two-hour helicopter flight.
With the 2020 Summer Olympics set to begin July 24, real estate has been ballooning in Tokyo, Osaka and other major cities near the capital, with prices rising as fewer apartments go on the market.
According to a 2018 report by Savills, winning the Olympic bid “triggered a wave of redevelopment transforming Tokyo and key regional cities.” The event “could be a stage to showcase a new Japan and set the country on a resilient growth track,” just as the 1964 Olympics in Tokyo heralded “a new era for Japan after World War II.”
“There is definitely a buzz in the city,” said Robert Crane, director of Solid Real Estate, a local brokerage. “There has also been quite a bit of investment in infrastructure and facilities.”
For example, apartments recently built on reclaimed land close to Tokyo Bay that are set to be occupied by Olympic athletes will be renovated and sold as apartments after the games, said Mori Nishimura, a sales consultant with the Housing Japan agency.
In general, Tokyo’s seven-year market rise has been the result of “monetary easing, low interest rates, a growing number of double-income households, changes to the inheritance tax system that created a favorable environment for owning real estate, a boom in foreign visitors, and an improving stock market,” said Zoe Ward, chief executive of the brokerage firm Japan Property Central.
Citing data from the Real Estate Economic Institute, Ms. Ward said that in 2019, 31,238 new apartments went on the market across greater Tokyo, down 15.9 percent from 2018, with an average price of 879,000 Japanese yen per square meter ($730 a square foot). Still, the number of reported apartment sales reached a record of 38,109, up 2.4 percent from 2018.
Despite the recent development, apartment supply has been falling as developers struggle to source enough land for new residential buildings. However, Ms. Ward said, “there’s a lot in the pipeline.”
The scarcity of land and a growing population have been driving prices up, especially “in popular areas like Shibuya, Ebisu, Akasaka, and Aoyama,” Mr. Crane added. In rural areas, the opposite often happens, he said, and there’s “an abundance of land with a declining population, so land prices continue to drop.”
Surging condo prices — a two-bedroom, one-bath apartment in central Tokyo costs about $1.2 million, Mr. Nishimura said — are “causing younger families to move to the Tokyo suburbs,” with at least an hour commute. Comparatively, a “decent” one- or two-bedroom apartment in a bedroom community costs about 35 million yen ($315,000).
Ms. Takano, the Sotheby’s manager, said that foreign buyers have been gravitating to the Minato ward, south of the city center. A new high-rise there, the Park Court Aoyama the Tower, is the first condo in Tokyo to have an infinity-edge swimming pool on the top floor. Mori Building’s 54-story Toranomon Hills Residential Tower, debuting next year, will have 547 residences within a large-scale mixed-use complex.
A single-family house in central Tokyo currently runs about 50 million yen ($448,000), Mr. Nishimura said. In 2019, in the greater Tokyo area, 13,037 such homes sold, up 2.5 percent from 2018. The average house price was 31,150,000 yen ($280,000), down 0.9 percent from 2018, the first year-over-year drop in five years.
“The concept of a starter home is less apparent here,” Ms. Ward said, noting that single-family homes are generally considered a once-in-a-lifetime purchase, so “resales aren’t abundant.”
But popular sentiment — or clever marketing by builders — holds that “most buildings are considered obsolete or of limited value after 25 or 30 years,” Mr. Crane said. “Generally, Japanese families have tended to demolish and rebuild their home every 30 years or so. The value is in the land under the building.”
Who Buys in Japan
“Japan is a safe haven for wealthy individuals in Asia,” Mr. Nishimura said. “Nowhere else in Asia can you buy freehold land as a foreigner.”
He added that he has seen an increase in inquiries from Hong Kong, where people “are looking to put their money somewhere else” as anti-government protests and the coronavirus unsettle China.
Most buyers come from Singapore, Malaysia, Thailand and Hong Kong. “As incomes are rising rapidly in other Asian countries, Japan is increasingly being seen as a beautiful, safe and affordable place to invest or have a second home, Mr. Crane said. Other inquiries come from the United States, Australia and western Europe. “Some international investors are looking for rental yields and to diversify their holdings outside their home countries, while others just want to have a holiday home in Japan.”
Buyers also hail from Taiwan, Indonesia and mainland China, Ms. Takano said.
There are no restrictions on foreigners buying real estate or land in Japan.
A “judicial scrivener” is used to check title and register new homeowners, Ms. Takano said.
Foreigners must live and work in Japan for at least three years to obtain a mortgage, Mr. Nishimura said, though nonresidents can apply through branches of Japanese banks in Singapore or Hong Kong for financing up to 50 percent. Locals can leverage up to 80 percent or 100 percent as a couple. Overseas mortgages start at 2.575 percent.
Languages and Currency
Japanese; Japanese yen (1 Japanese yen = $0.009)
Taxes and Fees
Stamp duty is on a sliding scale: For properties between 100 million and 500 million yen ($900,00 to $4.5 million), it is 60,000 yen ($540); for properties more than 500 million yen, it is 160,000 yen ($1,440).
The annual taxes on this property are about 300,000 Japanese yen ($2,700), Ms. Takano said. Buyer and seller each pay a 3 percent commission plus 60,000 yen ($540), along with a 10 percent consumption tax.
Yukiko Takano, List Sotheby’s, 011-810-334-545-504; sothebysrealty.com
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