The True Cost Of Building A Luxury Home In Hawaii

new home under construction
New home construction in the state may cost twice as much as a similar project in the mainland U.S.

The true cost of building a luxury home in Hawaii depends on time management, land prices, cost of labor and materials, and miscellaneous expenses.

Hawai’i Life, the state’s leading luxury property broker, provided a detailed guide for prospective homeowners in the Aloha State.

Among the essential tips included the cost per square foot of building a luxury house in Hawaii. As of 2021, the per-square-foot price ranged from $160 to $900.

In other words, new home construction in the state may cost twice as much as a similar project in the mainland U.S. (up to $500 per square foot). Here are other things to remember for building prime properties in Hawaii.

aerial view of homes and ocean in hawaii

Residential lots in Hawaii may cost more than similar properties on the mainland.

There’s Time And Then There’s ‘Hawaii Time’

Hawai’i Life agent Tom Selman describes ‘Hawaii Time’ as something that would “take longer than you think it will.”

Selman cited the state’s laid-back culture as one reason for supposed project delays, especially for permit procurement. One couple he recently represented had to wait for almost one year just to secure all the necessary building permits.

Because of the time investment, prospective home builders must be prudent in mapping out a construction schedule. While the approval process varies for every project, underestimating the required time can hinder your progress.

Once you settle all permits, the next step requires you to compare land prices. Keep in mind that residential lots in Hawaii may cost more than similar properties on the mainland.

sky-high view over kauai, hawaii

A residential lot’s actual price also depends if it’s an unfinished lot.

Land Prices Are The Biggest Cost Factor

The cost of land parcels in Hawaii may account for the biggest expense when it comes to building a luxury home. Because land is scarce, there are fewer opportunities for development.

For example, an almost 27,820-square-foot lot in Maui is listed for $2.2 million. The property’s proximity to the beach, one of Maui’s most popular, likely contributed to the price. Three additional lots in the community are priced between $2.6-3.2 million.

Not all extensive lots are the same. A former sugar cane farm consisting of 113 acres of private land above Honoka’a Town is for sale at $2.3 million. The property, which is currently pending sale, features several development prospects for a luxury home with an ocean view.

In Pupukea, near Oahu, an undeveloped lot on a ridge may cost as much as $2.6 million. The ultra-private land in Pupukea would provide you with a luxury home overlooking permanent mountain and ocean views.

A residential lot’s actual price also depends if it’s an unfinished lot. In this case, you’ll need contractors to create a sewage system or connect to an existing one.

Connections to the local power and water grids may be necessary as well. If you’re unable to find the right skilled labor and materials, expect to spend more when outsourcing them from the mainland.

hawaii sunset over water and sand

Construction labor for a luxury home project in Hawaii may account for up to half of expenses.

The Cost Of Labor And Materials

Construction labor for a luxury home project in Hawaii may account for up to half of expenses. The rest of the project’s cost comprises the materials, permits and professional fees.

While you should create a buffer for expenses, be prepared not to overspend by knowing the right preparation work.

For example, it’s recommended that buyers commission a geotechnical survey before excavating the land. The pre-construction survey allows you to see certain problems with the property’s foundation.

Otherwise, you may encounter issues such as bedrock blocking the soil. A solution would then need extra labor and machines, hence increasing the total cost that could have been prevented by a geotechnical survey.

A civil engineer often checks the land’s stability to learn about potential problems before breaking the ground. If the problem involves the availability of materials, be ready to spend up to twice the amount in Hawaii.

Selman said that most construction materials in the state need to be transported from the mainland. One such example is Yellow Pine lumber that you won’t find in the state.

Local materials often used in home construction projects include chia, brush box wood and black volcanic rock.

Hawaii’s isolated location isn’t the only thing that affects the cost of materials. A global supply chain disruption has happened since the pandemic in 2020.

The worldwide crisis has affected the prospects of home construction and renovation in the U.S., particularly in New York.

hawaii jungle road with palms and mountains in the mist

It’s true that a home purchase presents certain advantages, but the journey won’t be easy.

Buying A Luxury Home In Hawaii Isn’t Easy

At this point, you may be wondering if buying a luxury house would spare you from the inconvenience of building one.

It’s true that a home purchase presents certain advantages, but the journey won’t be easy. Most buyers inadvertently find themselves in the middle of a bidding war among their peers.

Luxury property buyers also experience time-related concerns for a home purchase. For example, one family even had to rent a house for almost a year before finally buying a property, according to Hawai’i Life.

diamondhead crater with ocean in the foreground

Founded in 2008, Hawaii Life achieves annual sales of more than USD 2 billion. Hawaii Life’s team consists of more than 350 skilled agents with unrivaled market expertise and approximately 40 creative and support staff located across the State of Hawaii.

An Elite Broker Makes A Huge Difference

Most prospective homeowners, whether by buying or building properties, avoid potential problems by working with a qualified professional. The same concept applies when you need a real estate broker.

An elite brokerage like Hawai’i Life not only helps you with scouting for the right property. The firm may also connect you with other important professionals for either a luxury home construction or purchase.

With over 350 skilled professionals, a local agent or realtor may suggest trustworthy contractors for building inspection or construction work.

If you need more time to decide, click here to browse the latest listings for luxury homes and residential lots in Hawaii.

Author

Randolf Santos has covered different segments of the real estate industry since 2014. He worked at S&P Global Market Intelligence before joining Forbes Global Properties as a contributor.

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