By LISA SCONTRAS
Custom Publishing Group

While the surging real estate market is predicted to lose some of its “frenzy” this year, the popularity of second-home purchases should remain robust throughout the coming decade. The National Association of Realtors forecasts that since more baby boomers will reach their mid 50s — prime second-home buying years — construction will continue to meet escalating demand.

New construction on Oahu — particularly in the condominium market — is attracting a combination of local, Mainland and international buyers.

“The whole world is looking at Hawaii,” says Prudential Locations LLC agent John Hayama, project sales manager at 909 Kapiolani. “It’s our location that makes this spot so unique.

“We’ve found that the units at 909 Kapiolani appeal to the international market for two basic reasons,” he says. “It’s conveniently located . . . and you can see the ocean.”

The long-term motivation falls into two groups — vacation-home buyers and investment buyers. Vacation-home buyers are making lifestyle choices and purchasing primarily for their own enjoyment — often as a future retirement home.

Russell Nishimoto, a partner at Prudential Locations and sales manager at The Loft at Waikiki estimates that one-third of his buyers intend to retire in their unit eventually.

Conversely, investment-home buyers are seeking rental income and portfolio diversification. Their plan is for the property to provide income in their retirement years.

NAR President Thomas M. Stevens adds, “Not all ‘second homes’ are necessarily a second home — particularly for investment buyers. Some of these purchases may be a third, fourth or fifth investment property, showing that housing is a good investment.”

Wallace Akamine, president of Realty Edge, recently sold some investments that had tripled in value on the Leeward side to purchase two units at Ko‘olani and three units at 909 Kapiolani. Holding on to some of his investments on the Leeward side, Akamine was ready to diversify.

“I’m thinking long-term rental income,” says Akamine, who believes the Kaka‘ako area is the place to be. “The whole package appeals to me.

“I think the baby boomers are a wealthy bunch,” he says. “The appeal of second homes is just starting to heat up and I wanted to get my foot in the door. Honolulu is where the action is and I want to have a piece of it.”

The NAR survey showed that one-third of vacation-home buyers and 36 percent of investment-home buyers said it was very likely they would purchase another home in addition to the properties currently owned within the next two years.

Sang Wook Kang lives in New York and already owned a winter home in Palm Beach when he decided to buy a unit at The Watermark in Waikiki.

“Palm Beach is the best-known resort area on the Mainland, but I love Waikiki,” he says.“When I come to Honolulu, I don’t want to come back. It’s a good resort area for international attraction.”

Akamine cites the strong rental market as a reason to buy a rental property on the island, and the success of the developments in the Ward theaters area together with the appeal of the Kaka‘ako corridor’s location which make that neighborhood particularly appealing.

“Part of the market is the boomers, but the other part is the international buyer,” he says. “And I think both are going to converge in the same area — Kaka‘ako.”

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