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Thinking about investing in Honolulu real estate in 2025? You're on the right track.
Despite global uncertainties, Honolulu's property market shows promising signs of growth and stability.
In this blog post, we will explore why investing in this vibrant city is a wise decision.
We rely on solid, up-to-date data and statistics from trusted sources to guide our analysis.
By the end, we will share our own conclusions based on a comprehensive review of the information. Enjoy the read!
This article gives you valuable insights, but remember, it’s not and will never be investment advice. We pull data from a range of sources to provide you with the most accurate picture possible, yet we can’t guarantee complete accuracy. Markets are difficult to predict. Make sure to do your own research and consult a professional before making any financial moves. Any risks or losses are your own responsibility.
Related analyses:
1) Honolulu boasts a strong "livability score" of 78, indicating it's a great place to live
Signal strength: moderate
The livability score of 78 in Honolulu is considered good, which is a positive indicator for real estate investment. This score reflects the city's high quality of life, which is attractive to potential residents and renters.
One reason for this high score is Honolulu's pleasant climate, offering warm temperatures and sunshine year-round, making it a desirable place to live. Additionally, the city boasts excellent healthcare facilities, ensuring residents have access to top-notch medical services. Furthermore, Honolulu is known for its vibrant cultural scene, with numerous festivals, events, and activities that enrich the community experience.
These factors contribute to the city's overall appeal, making it a strong market for property investment as demand for housing remains steady. Investors can expect a consistent influx of people looking to live in such a well-rounded environment.
However, if the livability score were to drop below 70, it might indicate potential issues that could affect property values negatively.
Source: AreaVibes
2) In 2025, Honolulu's "Hālawa View II" project will improve affordable housing and likely increase property values
Signal strength: moderate
In 2025, Honolulu's Hālawa View II project will enhance affordable housing and potentially boost real estate values, making buying a property there a good investment. The project, located near Pearl Harbor on the island of O’ahu, will add 302 new affordable homes, providing housing options for low-income families earning up to 60 percent of the area median income. This aligns with the Hālawa Area TOD Plan and addresses the need for affordable housing in Honolulu.
The proximity to Honolulu’s new rail line will enhance accessibility to various neighborhoods around the city, potentially boosting real estate value in the area. Improved transportation infrastructure often leads to increased property demand, as it makes commuting easier and more convenient for residents. This can result in higher property values over time, benefiting property owners.
Additionally, the City Center Guideway and Stations Project, part of the Honolulu Rail Transit Project, will further enhance connectivity in downtown Honolulu. Although its completion is beyond 2026, the project's impact on the city's infrastructure and real estate is significant. Enhanced connectivity can attract more businesses and residents, increasing the area's desirability and property values.
Investing in property near these developments can be advantageous due to the anticipated rise in demand and property values. As the area becomes more accessible and desirable, property owners may see a return on investment through increased property values and potential rental income.
Sources: Honolulu Transit, Hunt Companies
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3) Honolulu's population is on the rise, with the metro area expanding by "0.88%"
Signal strength: moderate
The population growth in Honolulu, particularly in its metro area, is a positive indicator for real estate investment. With the metro area population increasing by 0.88% from 2023 to 2024, there is a clear trend of steady growth.
This growth suggests a rising demand for housing as more people move into the area, which can lead to increased property values over time. As the population continues to expand, the need for residential and commercial spaces will likely grow, making property ownership a potentially lucrative opportunity.
Moreover, the long-term projections for Honolulu County, with an annual growth rate of 0.2% from 2020 to 2050, further support the idea of a stable and growing market. This consistent increase in population can provide a reliable foundation for property investments, as it indicates ongoing demand and potential for appreciation.
Despite the overall decline in Hawaii's population, Honolulu's growth stands out, highlighting its unique appeal and economic potential. This makes it an attractive location for investors looking to capitalize on the area's development and population trends.
Sources: Macrotrends, SFGate, DBEDT, World Population Review, DBEDT Long-range Projections
4) Airbnb or short-term rentals in Honolulu offer a "moderately attractive" profit margin of 4.0%
Signal strength: moderate
The cash-on-cash return on Airbnb in Honolulu is 4.0%, which is considered moderately attractive for investors. This percentage indicates that the income generated from renting out a property on Airbnb is relatively healthy compared to the initial cash investment.
Honolulu attracts a diverse range of short-term tenants, including tourists seeking a tropical vacation experience and business travelers attending conferences or meetings. These visitors often prefer the flexibility and amenities of Airbnb rentals over traditional hotels, which can lead to consistent demand for rental properties.
Additionally, Honolulu's year-round warm climate and beautiful beaches make it a popular destination, ensuring a steady flow of tourists throughout the year. This consistent demand can help maintain occupancy rates and rental income, making it a potentially lucrative market for property investors.
However, if the cash-on-cash return were to drop below 2.0%, it might indicate that the investment is less attractive, as the income generated would not sufficiently cover the initial investment costs.
Source: Mashvisor
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So, is investing in real estate in Honolulu a solid option in 2025? Absolutely, it is.
Investing in real estate in Honolulu in 2025 is a promising opportunity.
First, the city boasts a livability score of 78, reflecting its high quality of life, pleasant climate, and excellent healthcare facilities. These factors make Honolulu an attractive place to live, ensuring a steady demand for housing. The upcoming Hālawa View II project will further enhance the real estate market by improving affordable housing and increasing property values, especially with its proximity to the new rail line.
Moreover, Honolulu's population is on the rise, with a 0.88% increase in the metro area, indicating a growing demand for housing. This trend suggests that property values are likely to appreciate over time. Additionally, the cash-on-cash return for Airbnb in Honolulu is 4.0%, offering a moderately attractive return for investors. The city's appeal to tourists and business travelers ensures a consistent demand for short-term rentals.