Cost of Living in Hawaii 2023

What do leasehold and fee simple mean in Hawaii real estate?

Terminology is key to understanding Hawaii’s real estate game.

In order to “be happy” in Hawaii in 2023, one study reports that you’ll need a whopping salary of just under $200,000. (Of course, every report is different and the standards of living vary according to each person and their measures of “happiness.”) The Living Wage Calculator from the Massachusetts Institute of Technology (MIT) says that one adult in Honolulu needs to make $22.76 per hour for a living wage. If that is a couple (both working) with 2 children, each adult needs to make $30.32 per hour.

According to Payscale, the average salary in the island’s capital, Honolulu, is $72,000, but the state has the second-highest income tax rates in the country, with its top bracket at 11 percent. According to the Bureau of Labor Statistics, the median U.S. salary, as of the 4th quarter in 2022, is $56,368 ($1,084 weekly). In another analysis by Indeed.com in February 2023, the average salary in Hawaii for an office assistant is $37,644 while the average salary for a physician is $192,360. Most of this data is unadjusted and based on job posts and user verification.

But for many people, even with increasing inflation, Honolulu’s appealing qualities balance out the potentially lower wages and high cost of living.

Renting in Hawaii is much more expensive than most places on the mainland – and it all depends on location. For example, a studio on Oahu can range from $1,000 to more than $1,600 per month and that’s not including utilities, which can be around $150 per month for one person. A one-bedroom apartment or home can range from about $1,500 to more than $2,000 per month and a two-bedroom apartment or a house will start at $1,800 per month. Looking at a luxurious, new one-bedroom condo? Expect to fork out at least $3,000 a month.

You can always opt to live outside of Honolulu’s center or even consider the other Hawaiian Islands – the Big Island’s Hilo is nearly 49 to 56 percent lower than Honolulu, plus offers a laidback and relaxing small-town vibe that may be appealing than the hustle and bustle of the city.

If you’re looking to buy, the median sales price of a single-family home on Oahu is $1,083,750 – a new record high, as of March 2023. The median sales price for a condo on Oahu is $536,000. Despite the high prices, increase of interest rates, and lack of inventory, Oahu continues to see demand in home and condo sales.

Alternatively, buying a piece of land and building your own home could be more affordable, but that depends on location and your general contractor. You can find the average costs associated with building your own home in Hawaii in this blog post.

Buying Strategy

For those who can’t afford a single-family home or condo, look for new affordable housing developments – they provide opportunities to qualified applicants so they can purchase new housing for below-market prices.

Connect with a real estate agent in Hawaii to start your search.

Hawaii’s residents pay the most when it comes to monthly energy bills in the nation. According to Payless Power’s report on electricity rates by state, you can expect to pay an average of $393.87 per month for electricity. Electric bills will vary depending on the type of residence you live in, how many people you live with, how often you’re at home, and if you use air conditioners (most do).

It’s also worth mentioning that with the recent rise of oil prices due to the war between Ukraine and Russia, Hawaiian Electric, Hawaii’s primary electricity provider for 5 of the Hawaiian islands, anticipates an additional 20% increase in rates for residents on Oahu and a 20% increase for residents on the Big Island of Hawaii and Maui.

Despite the high cost of energy, the sun shines in Hawaii at a rate of 8% more than other states, creating an opportunity for cost effective solar energy. Between 20% and 40% of homes on Oahu, Maui, and the Big Island of Hawaii have rooftop solar. In fact, Hawaii was the first state to set a deadline for generating 100% of its electricity from renewable sources by 2045.

Can you live without A/C?

Instead of using A/C, apply a cool roof coating to your roof. Room temperatures could decrease by 20°.

Let’s say you do choose to live outside of the busy Honolulu or downtown area – you’ll then need to consider the cost of owning and driving a vehicle. Gas prices as of February 2023 is about $4.80 per gallon in Honolulu. Taking the bus or, in Oahu, TheBus, may be a more affordable method of transportation, at $80.00 a month for unlimited rides, although it may not be an appealing daily commute of choice.

If you work in downtown Honolulu or Waikiki, you’ll most likely need to rent a parking spot in the case your company doesn’t provide one. Parking ranges typically from $150 to $300 per month. Those who live in a condo may also need to rent a stall, although it depends on association rules.

If you live in Kapolei or on the Ewa side of Oahu, you might be able to take the Honolulu Rail Transit to work. However, there have been many delays with its construction; read more here.

Food is delicious in paradise, especially with an abundance of tropical fruits, vegetables and locally grown coffee. But Hawaii is the most expensive place to buy groceries in the nation, especially because products are shipped from the mainland. According to a 2022 annual report by the Missouri Economic Research and Information Center, Hawaii’s groceries are incredibly steep. The study used a national index of 100 and Hawaii ranked at 150.1, while comparatively Washingon D.C. ranked at 109.3, New York at 112.3 and California at 115.2.

For example, a gallon of whole milk on Oahu can be $9 – the cheapest at Costco or Sam’s Club for around $5 a gallon. Broccoli is at $3.79 a pound, bulk carrots at $3.49 a pound. And yes, while buying local is encouraged, the cost of Hawaii grown mangos are at about $6.99 a pound. Four rolls of toilet paper will be about $6.

Eating out will add up quickly. The average cost of breakfast in Hawaii is $9 to $15, lunch at about $12 to $18 and dinner will cost $15 to $30 (or more). There’s a huge price range though, so many people will buy a plate lunch (white rice, mac salad, and meat entrée like loco moco or teriyaki beef) and save it for lunch and dinner, or split the entire plate in half with a friend.

Income tax rates range from 1.4 percent to 11 percent.

Ready for some good news? Honolulu’s residential property tax rate is 0.35 percent, one of the lowest rates in the nation.

For retirees, Hawaii can be fairly appealing as the state exempts Social Security retirement benefits and public pension income from state taxes. It fully taxes income from private pensions and retirement savings accounts.

For employers or entrepreneurs in Hawaii who are looking to pay for their own health insurance, according to a study updated by MoneyGeek.com in February 2023, you can expect to pay an average of $446 per month or $5,353 annually. Those costs are on the lower end of the spectrum compared to the rest of the nation, but it’s also important to note that year-after-year, Hawaii’s health care system is one of the best in the nation. Hawaii received top scores for access and affordability, prevention and treatment, and other performance indicators. Typically, health insurance in Hawaii is provided through four main companies: Kaiser Foundation Health Plan Inc., Hawaii Medical Service Association (HMSA), UHA Health Insurance, or Hawaii Medical Assurance Association (HMAA).

Hawaii’s public school system is the nation’s only statewide system governed by one Superintendent and the Hawaii Board of Education. In other words, there’s only one public school district for all of Hawaii’s islands. Because of this unique governance structure, criticized for its “one size fits all” approach, parents often seek out private schools that fit the individual needs of their children. And that comes at a cost.

Below is a table showing Hawaii’s ten largest private schools and their tuition costs:

The high cost of living in Hawaii has many reasons, but the short answer is the fact that we’re surrounded by water. Nearly everything we consume has to be shipped here or flown. Hawaii is also a desirable place foreign investors to buy property, which continues to drive up housing costs. Another big factor: utility bills such as electricity is sky high, thanks to the warm climate. Like with many things in life, there is certainly a trade-off.

Compare the cost of living between Honolulu, Hawaii’s capital, to other cities across the United States.

Download Table

While the calculations in the download above provide a rough estimate of living in these locations, we can come to a few conclusions:

While the cost of living in Hawaii may be daunting at first, it requires a bit of soul searching and close look at your lifestyle. If you’re used to a certain standard of living, you may need to make a few sacrifices when moving to Hawaii. But, it may not seem like a sacrifice to nix that luxury car or to eat out less, especially if living near the ocean, enjoying a warm climate and healthy island environment are important to you. It’s all about balancing your values and discovering what works for you and your family.

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