Study: Out-of-state buyers aren’t the only ones to blame for Hawaii’s hot housing market
HONOLULU (HawaiiNewsNow) - Oahu’s median home price is well above $1 million.
Out-of-state buyers have been long blamed for driving up the cost, but a recent study shows they aren’t the only ones at fault.
Grassroot Institute of Hawaii, which conducted the study, said government regulations also play a role.
“The problem with blaming out of state buyers for the high cost of housing in Hawaii, is that it turns them into a class of scapegoats,” said Institute President and CEO Kelii Akina.
According to data released by the Department of Business, Economic Development and Tourism, over 24% of buyers were from out-of-state while more than 75% of home purchases were by local buyers in 2021.
But the data also revealed that while most purchases are by in-state residents, outsiders are willing to pay a lot more, attracting developers to those buyers.
“I think the point is, our market has switched from a local market to an international market,” said President of Savio Group Peter Savio. “Our people are suffering. Our people are not able to buy.”
Akina said the best thing the government could do to promote affordable housing is to make them affordable to build. He added that the lack of land and permit rules pose a bigger problem.
“Government regulations make it so cost prohibitive for developers that they end up seeking out high end purchasers for high end projects,” said Akina.
CEO of Avalon Development Christina Camp agrees. She said changes to the permit process would enable homes to be delivered faster and at appropriate rates for Hawaii residents.
Savio said homes need to be built at the price or incomes of a community.
“Our incomes are lower than the mainland and foreign buyers,” said Savio. “So, if we don’t build for our community, we need to go back to being a local market, where we build based on income.”
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