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Why Chinese are eyeing real estate in Hawaii
Hawaii is a dream vacation destination for many and the same goes for the Chinese who not only love to holiday there but are also increasingly attracted to the Pacific Island state’s real estate.
According to Juwai.com’s latest data, enquiries for Hawaiian properties rose over 250 per cent from Q2 2019 to Q4 2019. Hawaii currently ranks 10th on Juwai’s most-enquired US state and Honolulu, its capital, ranks 12th as the most-enquired US city.
However, the timing of the surge in enquiries may also suggest that Hong Kong-based Chinese investors are hunting for homes outside the Asian financial hub to escape the tense anti-government protests which broke out in the city in June last year and look set to drag on in 2020.
That being said, Chinese buyers turning to Hawaiian real estate as an option for a second home or grow their investment portfolio is not surprising. Most enquiries on Juwai.com – 75.2 per cent – say they are looking for Hawaiian properties for their own use while 56.8 per cent say it’s for investment.
Let’s look at what makes Hawaii so attractive to Chinese home buyers.
Location
Hawaii is strategically located right in the middle between the United States and China in the Pacific Ocean. With the launch of direct flights between Beijing, Shanghai and Honolulu, Hawaii is an ideal base for investors looking to strengthen business ties with the US mainland and Asia Pacific as well as for those looking for a second home that is still easily accessible from their homeland. This is most apparent on the island of Oahu where Honolulu is located.
Lifestyle
Hawaii offers stunning natural beauty and a relaxed way of life that is vastly different from the cities of China and let’s be honest, who wouldn’t want to live there? Oahu is a world-class destination with clean air, natural beauty and a multi-ethnic population, all of which makes the island very appealing to Chinese buyers.
In 2018, the personal finance site, WalletHub, cited Hawaii as the “happiest state in America†after examining 31 different metrics which included the number of work hours, job security, adult depression, income growth, and even the weather.
The spirit of aloha (literal translation peace, love and compassion – a philosophy embraced by all Hawaiians and is even enshrined in local law) is another contributing factor that makes the Pacific island a second home location of choice for buyers from around the world.
Low supply
The relative scarcity of Hawaiian real estate keeps the property market strong and ensure stable price growth. Investment in Oahu real estate is considered safe and offers potentially big returns. Housing prices on Oahu are predicted to continue to increase as a result of low inventory and consistent high demand.
High rental yields
Honolulu is potentially the best location for those seeking rental income as it displays a robust job market and growing household income. Hawaii’s GDP is expected to increase 1.4 per cent in both 2020 and 2021 and wages are rising.
Oahu is also expected to have a housing shortfall over the next ten years. Given the relative lack of space to build new housing, this will drive up rental rates up.
What kind of real estate do Chinese buyers look for?
Homes and condominiums with good views, such as an oceanfront property, are what some Chinese buyers are attracted to.
According to Juwai, Chinese are looking at properties with the average price of around USD339,000. Currently, condominium prices average around USD390,000 in some areas which may suit potential Chinese buyers’ wallet and real estate agents say prices are going up every year if not every month.
