Hawaii Convention Center - Oahu on Ala Wai Canal
It is estimated that – in general – things cost about 30% more on Hawaii than they do on the mainland. Shipping the food over the ocean in boats (or planes) is one reason, but another is that the grocers have to maintain huge stocks of food in warehouses to keep food on the shelves all the time.
This requires a lot more money to pay the rent and people for running the warehouses.
Another reason is Hawaii’s 4% excise tax. Which is added to just about everything business related.
Of course the main issue factoring into the high cost of living in Hawaii is the cost of housing – owning and renting homes. In 2006 the average single family home in Hawaii was $625K. Condos were $309K.
Rent on Oahu for a studio is very high – $700+.
The reason land and homes are so expensive is because land is not a renewable resource. What is here on the islands is all you have to work with. With the rugged terrain there is a lot of land it isn’t possible to build on.
Want to know the big reason prices are so high?
Demand. There are people WILLING to pay $600-900K for a regular sized home on Oahu or Maui. In most cases they are moving from Japan or California and have sold their home there – and received about the same amount. It’s a rather affordable move for them.
The number of people that would answer ‘yes’ if you asked them, ‘if you could, would you live in Hawaii?’ is astounding.
I don’t know many that would answer ‘no’ – do you?
Why is the demand so high for housing and rental units in Hawaii?
Well, there is a whole lot to like about the islands! Personally I rate it as one of the two top places to live in the world. Krabi, Thailand is one, and somewhere on Maui is another one. It’s a tough call to label one as better than the other – there are vast differences between them. Hawaii is, without a doubt, the best place to live in the USA. Hands down – the winner!
Hawaii has clean air, clean water, what I’d call perfect weather, a wide range of environments – forest, desert, beaches, a great group of people, great restaurants, and decent nightlife.
If you’ve already lived in Tokyo, Japan; Seoul, Korea; Hollywood, California, or New York City, New York you’ll think Hawaii cost of living is reasonable and won’t be affected by it. If you’ve lived anywhere else you will probably become very cost-conscious once you start living on Oahu, Maui, Kauai, or Big Island.
For two people living in Waikiki or downtown Honolulu on Oahu you would spend $850-1000 for a studio or sketchy 1-bedroom. Sketchy is an Aussie word I’ve been using for a little while, hope it doesn’t put you off. It means same thing as “dodgy”.
Car insurance, health insurance, fire insurance, every insurance, is more expensive in Hawaii. If you ride a motorcycle, be prepared to sign away a good portion of your monthly income to insurance. The whole living in Hawaii experience is outrageously expensive and it may go against your common sense to live here – but, you may not be able to resist!
Many Hawaii residents have 2 and 3 jobs to keep up with expenses. It’s safe to say you’ll meet more people working 2-3 jobs in Hawaii than you have ever met anywhere else in your life.
I was grocery shopping on Oahu the first time after I returned to Hawaii. To my astonishment, everything in my cart was over $5. Everything. I had trouble finding something to buy that was under $5. I had to actually look.
Add to that the cost of gas, renting apartments that are very small and with pay for parking issues all over Waikiki if that’s where you plan to stay, and it gets expensive. Auto and health insurance is expensive too. Can you live in Hawaii making $25,000 per year? Yes, probably. But, be prepared to be really frugal and live in a manner you may not be accustomed to (slumming).
High Electricity Costs
Hawaii’s electrical generators are run on petroleum for the most part. When the price of gas went through the roof – so did electricity in Hawaii. The islands now boast the highest cost for electricity per unit – in the USA. It’s about 300% of the national average.
As of 9/2008 Oahu residents were paying 32.5 cents per kilowatt-hour!
Your average bill for a home will be over $200 and probably more like $300.
About Vern Lovic
Aloha! I'm "Vern". I created this site to focus on Hawaii - all the islands - Oahu, Maui, Kauai, Big Island and even Molokai and Lanai and Kahoolawe when I can find information on them. I love living in Hawaii, and I think you would too. I hope you come away with something positive as a result of visiting Aim for Awesome. Feel free to add comments or contact me through email. All written content on this site by Vern Lovic. Contact me at Google+. Best of Life to You in 2013 - Aloha!
im only 17 but ive always wanted to live in Hawaii .. im going to the marines in about 2 years and might make it a career im not positive yet ,, if not im gonna try serving the marines one term and then become a cop and go to collage right after or while im in but do you think id be set ? if i became a cop in Hawaii and was in the military ? .. i mean benefits ,, a degree .. seems pretty good .
What Do You Thiinkk ??
I spent a few years in Hawaii and then returned to Saratoga Springs, NY. When I moved back to Maui, I had long forgotten how expensive island living can be. I did spend a summer in Tokyo, in 1999, and that still makes Maui look relatively inexpensive. I think that’s why I have an amazing life… I have a bad memory.
I have learned to be open to change. I see what is on sale and I buy things that are grown locally. I actually started visiting the farmers’ markets and was able to save. The Green Dragon Farmers’ Market has much to offer and it is an indoor market. I am more of a “city girl,” so growing a garden was huge for me. Huge!!! I learned to enjoy gardening… though I needed manicures more frequently. Still… a nice trade-off.
We are moving off-island shortly and returning to the East Coast. I will miss the islands. They will ALWAYS be home to me.
Brigid Kim
Thanks for your comment Kim… I like the farmer’s markets and the market in China town on Oahu. On every island there are cheaper places to buy fresh fruits and vegetables, not overlooking the streets where people with mango trees, avocado trees, and other fruits – sell it or give it away on a table in front of the house. If you have any sort of land – growing something to eat makes sense in Hawaii!