Home to the some of the world’s most coveted beaches and most beautiful landscapes, Hawaii has investors jumping at the chance to scoop up a piece of paradise and own some of the most magnificent property available. With buyers of all types rushing to the islands, there has been a marked presence by foreign investors that has impacted the market. However, what does this mean for the Hawaiian real estate market?
In a recent study, the Department of Business, Economic Development and Tourism (DBEDT) looked into the average sale prices of homes sold in Hawaii to both foreign buyers and local buyers from 2008 to 2015. They found that on average, foreign buyers spent $785,604 while mainlanders spent an average of $630,390 and the average price of homes sold to locals was $478,198. In addition, a considerable fraction – more than a quarter on Hawaii and nearly half on neighboring islands – of homes bought are being acquired by out-of-state investors.
Depending on who you are, these trends could affect you in very different ways. The influx of interest has prompted sellers and builders to accommodate wealthier, out-of-state investors who therefore won’t have a problem purchasing their dream getaway. However, for local non-homeowners, this foreigner-friendly market makes it more difficult for renters to eventually become homeowners. In the case of homeowners on Hawaii and neighboring islands, high demand from non-locals for luxury homes is contributing to increased home values across the board, benefitting foreign and local homeowners alike.
While real estate in Hawaii is pricey, it is more expensive because it is more valuable. If you are considering investing in property in Hawaii, consider that while rents go up, mortgage payments stay the same, so $1,000 a month today will be the same twenty years down the road, while your rent could increase two or three fold by then. Demand is strong, but that doesn’t mean a shortage of supply. Check out the local listings from the drop-down menu above to see what’s available now!