COURTESY AUGIE SALBOSA This beachfront estate at 51 Kaikea Place was bought for $22 million cash.

Sold! Kailua estate goes for $22M

Weak dollar makes paradise affordable to international buyers

A renovated Kailua beachfront estate has fetched $22 million from an international investor, marking the largest single-family home purchase on Oahu since 2006.

The all-cash sale of 51 Kaikea Place, which closed yesterday, is just more evidence that it is still busy at the top on Oahu, and international buyers appear to be driving the high-end market. International buyers have long had a love affair with Hawaii; however, product reinvestment and improved exchange rates have reignited their passion. Indeed, the top five sales on Oahu since 1989 went to international buyers.

International buyers and offshore investors topped the list of highest-priced Hawaii home purchases in 2007 and are expected to do more of the same in 2008.

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A beachfront estate on the Windward side of Oahu has sold to an international investor for $22 million, the highest transaction on the island since 2006 and the third highest on record.

The last sale of this magnitude on Oahu occurred in July 2006 when a European investor bought 145 and 151 Kailuana Loop for $24 million. The next closest sale was $23 million in 1989, said Harvey Shapiro, research economist for the Honolulu Board of Realtors.

"These are out-of-bounds prices. We don't have that many of them," Shapiro said, yet he added that activity in Oahu's $2 million-plus market is quite strong.

The all-cash sale of 51 Kaikea Place, which closed yesterday, is just more evidence that it is still busy at the top on Oahu. International buyers, who have long had a love affair with Hawaii, appear to be driving the market, experts have said. As developers have reinvested in the product and the dollar has weakened against foreign currencies, foreign interest in the islands has improved, they said. Indeed, the top five sales on Oahu since 1989 went to international buyers.

Hawaii's international buying market, which led to some high-profile sales last year, already has set records in 2008. Going forward, Hawaii real estate experts have said that they expect to see more of the same.

"There's going to be a tremendous push for high-end Hawaii real estate -- especially from foreign buyers and investors," said real estate analyst Stefany Sofos.

A weak dollar has made Hawaii real estate a veritable bargain for international buyers and investors, Sofos said. And, improved technology has made it easier for these buyers to find deals and to live in Hawaii, she said.

According to the year-end real estate report released yesterday by Prudential Locations, strong demand from these buyers is evident in the statistics for Oahu's high-end condominiums and single-family homes.

Sales in the $1 million-plus, single-family home range increased by 2 percent for 2007, while sales below $1 million decreased by 11.4 percent, said John Jacobson, real estate research analyst for Prudential Locations.

"Unfortunately for local people, it's becoming harder to buy a piece of paradise," Sofos said. "But there seem to be plenty of people from outside of Hawaii who have the wherewithal to buy, and they are doing it.

Coldwell Banker Pacific Properties' Tracey Pflueger Allen, who brokered both the $22 million and the $24 million deals, said that there is tremendous demand for Hawaii from luxury buyers who will pay premium prices if the property is right.

She sold the $24 million property in six months and the $22 million, 2-acre Kailua beachfront estate just four months after it was listed, Pflueger Allen said. Both properties received interest from the mainland, the neighbor islands and abroad, she said.

"These buyers are in love with Hawaii, and they are looking for trophy properties," she said. "When you have a rare property, extraordinary prices are achievable."

Like many of Oahu's most recent high-end transactions, the owner of the $22 million estate, which was built in the open-air style of old Hawaii, spent a year upgrading the property before listing it, Pflueger Allen said.

"That's what it takes to get premium prices," she said. "Buyers respond well to perfectly polished properties that sparkle."

And, if they want it bad enough, well-heeled buyers will pay cash as they did for both Kailua properties.

"I'm not doing a lot of loans right now," Pflueger Allen said.