More Japanese vacationers
are expected to be looking
for second homes in Hawaii
The Golden Week holiday period in Japan, which brings a quick boost in tourist travel to Hawaii, could also put a sparkle in the state's second-home buying market.
Golden Week, which runs from April 27 to May 7 this year, is a traditional time that Japanese workers take vacation en masse. Hawaii's visitor industry has long geared up for this annual rite of spring, when tourists from Japan fill hotels. This season, the real estate community is gearing up, too
Real estate agents, home builders and hotel leaders offering a range of condominium and time-share products are reporting that Japanese buyers are showing an increased interest in Hawaii property. The state's positive tourism outlook combined with the weakening of the U.S. dollar has reignited the interest of Asian buyers, who are anxious to spend.
"Exchange rates are in a position today and have been for the past three to six months where it is extraordinarily advantageous for a foreign buyer to make a real estate investment in Hawaii," said Paul Brewbaker, Bank of Hawaii chief economist. "Our home prices may have risen, but to the Japanese they are comparatively cheaper than they were a year or two ago."
While Hawaii's real estate industry doesn't keep statistics on the growth of the Japan market, anecdotally businesses report increases across the board as foreign buyers try to capitalize on the yen's advantage in this market. The increase in visitors from Japan during Golden Week, which could rise as much as 15.2 percent this year, is expected to further boost the market, said Masako Nashimoto-Lutrell, president of communications and consulting company Nashimoto & Associates and author of the Japan-targeted "Hawaii Timeshare Book."
"We expect a very strong Golden Week," said Nashimoto-Lutrell, who added that an all-time high of 602,000 Japanese are expected to travel during this time period with as many as 53,000 of them coming to Hawaii.
Since last August, second-home inquiries from Asia buyers have increased by 20 percent or more at Sachi Hawaii Pacific Century Properties, said Chikako Tomita, broker in charge of the company.
The company is expecting an even larger increase during Golden Week, she said.
"We'll probably have two to three calls a day," Tomita said. "The Japanese economy and currency have improved and people want to start spending their money."
Japanese baby boomers, which make up the largest percent of the Japan tourist market to Hawaii, office ladies and family travelers alike are all players in this recovering market, thanks to the range of second home products, Nashimoto-Lutrell said.
For about the price of a car, buyers can purchase a time-share week. Those who want more permanent accommodations can buy a condominium room in a hotel pool. Others, who want to make a deeper investment in Hawaii's second-home market, are opting for residential condos or fee-simple homes.
"There's been a lot of financial innovation on the supply side. Developers have begun to carve up titles into more finely sliced pieces and they've been able to distribute those smaller pieces to a broader class of investors," Brewbaker said.
As the range of second-home products has grown in Hawaii, so has the market, he said.
That's been evidenced at resorts by Hilton and Starwood, where the rate of second-home ownership has approximated the share of those who stay in the hotels, said Keith Vieira, senior vice president and director of operations for Starwood Hotels & Resorts Worldwide Inc. in Hawaii and French Polynesia.
"There is a growing market of Japan second-home buyers who are interested in time-shares and condos," Vieira said.
The Ala Moana Hotel, owned by Crescent Heights, is soon slated to become one of Waikiki's newest "condotels," condominiums that allow owners to rent out their units like hotel rooms.
"It's going to be very popular with the Japan market," Nashimoto-Lutrell said.