Is buying a house on Oahu a good investment?

With its limited availability, stable market, and growing vacation rental market, owning a piece of Hawaii is a solid, safe investment. Whether you're looking for a vacation home, rental property, or a long-term investment, Hawaii real estate offers something for everyone.



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Over the last 40 years in the State of Hawai'i, we have seen that the average year-over-year appreciation in home value has been around +3.5%. That's not to say that every year has reflected an increase; in fact, there were years in the last 40 when we saw double-digit drops in appreciation.

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With its limited availability, stable market, and growing vacation rental market, owning a piece of Hawaii is a solid, safe investment. Whether you're looking for a vacation home, rental property, or a long-term investment, Hawaii real estate offers something for everyone.

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One of the greatest challenges of living in Hawaii is the high cost of living. The islands are popular tourist destinations, which drives up the cost of housing, food, and other essential goods and services.

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Average Home Prices: The average median home price in Hawaii is $679,600, down by 9.07% YoY. In 2023, experts predict the median sale price growth to drop by roughly 4%, the first annual drop since 2012. Currently, the sale-to-list price ratio is at 98.1%, with a decline of 2.8 pt YoY as of April 2023.

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Hawaii is the most expensive state in the U.S. while California ranks third. When you compare the cost of living in Hawaii and that of California, you will likely find that Hawaii's cost of living is considerably higher. The cost of living index in Hawaii is 196.3 while that in California is 138.5.

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But, there are important differences between Maui and Oahu vacations. If you're looking for a typical Hawaiian tourist vacation, Oahu offers Waikiki Beach, historical memorials and modern culture. Meanwhile, travelers should head to Maui to enjoy outdoorsy adventures, from snorkeling to hiking volcanic peaks.

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(5) You can have a cash flow from rental income. As of July 2021, the average rent for a one-bedroom apartment in Honolulu is around $2,000. If you get a deal and buy a one-bedroom apartment for $250,000 cash, with the utilities and maintenance fees at $1,100 per month, you would be making $900 cash flow monthly.

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