Cost Of Living In Hawaii 2024
Hawaii is a paradise and a dream destination for many, boasting idyllic landscapes and a melting pot of diverse cultures. In general the cost of living in the paradise state matches that, it can vary highly depending on location. Hawaii is made up of eight major islands - Ni’hau, Kaua’i, O’ahu, Moloka’i, Lana’i, Kaho’olawe, Maui, and Hawai’i (island).
Last year as inflation increased it definitely impacted Hawaii's cost of living in several ways. We really felt the numbers in our, food costs with groceries and eating out rising significantly. Rents and electricity costs increased, while gas prices moderated and home prices pulled back slightly by the end of the year. Going forward for 2024 we expect costs to level out in most areas as inflation eases. Electricity costs are expected to increase due to a different cost structure by HECO, and home prices will follow as interest move. As rates come down, prices should move up.
HiEstates is based on Oahu, where I live, so that’s where this blog post will be focusing. Some of the most coveted homes in the world reside here, with prestigious neighborhoods like Kahala being called the “Beverly Hills of Hawaii.”
Hawaii consistently ranks as one of the most expensive states to live in the United States due to limited real estate, the need to ship goods from the mainland, and the desirability of living here. The median home cost is significantly higher than the national average, and rent can run steep depending on the location and type of accommodation.
The first step to living here is being well informed on what your future costs will be. Below, I break down a few of the most important factors to consider in cost of living.
The annual average from the entirety of last year is showing Hawaii with a composite cost of living index of 180.3, with 100 being the average across the entire country. This information was gathered by the Council for Community & Economic Research (C2ER) and seems to show that, relative to the rest of the United States, Hawaii’s cost of living has gone down over time. While Hawaii maintains its position as the most expensive state overall, data shows that Alaska has more expensive healthcare, utilities, and grocery costs.
As we head into 2024, data is showing Hawaii with a housing index of 313.1 annual average for last year - meaning that Hawaii housing costs are just over three times the average for the USA. This is to be expected, given the state’s location and limited land-mass.
Anchoring that housing index into reality, let’s look at the median sale prices from our last report of last year. Single-family homes on Oahu had a median sale price of $996,500, with condos having a median sale price of $510,000. When compared to Seattle, Washington, this could be seen as a modest upgrade. But if you’re coming from New Mexico, the price of homes and what you get for the money may give you sticker shock!
Other than the sticker price, the main difference between a home here and on the mainland is the amount of space that the money buys you. Hawaii homes tend to be smaller, with yards and open spaces dictating a premium price.
What you get in exchange though is a life unlike any other. Some of the most luxurious and breathtaking neighborhoods in the world are on the island of Oahu, Hawaii. One such example is Kahala - world renowned as the ‘Beverly Hills of Hawaii.' Right next door is Diamond Head - an amazing neighborhood at the base of the Diamond Head crater, offering wide open streets and a family friendly community.
In Metro Honolulu, condo living is a more affordable alternative to purchasing a single-family property, and thus a common choice for many who want to live here. One of the latest up and coming areas on Oahu is Ward Village - a 60 acre Master-Planned Community built with pedestrian access in mind. The main theme of this development is blending luxurious condo living in the Urban Core of Honolulu with the Island Lifestyle that Hawaii offers. These condos are perfect for low maintenance, high amenity living - as either a first or second home.
Long Term Renting
Long-term cost of renting is a crucial aspect of the cost of living that is especially important for those considering relocation without immediate plans to purchase a property. Rental costs are often subject to fluctuations due to a variety of factors, but they form an important snapshot of the whole.
As of early 2024, long term studio rentals could be found for an average of $1,893 for a year lease. From there it ranges up, with 1 Bedroom being an average of $2,400, 2 Bedroom being an average of $2,696, and 3 Bedrooms being an average of $3,200 (all for a 12 month lease). In general, the more desirable the area and more bedrooms you need, the higher the price will scale.
Income Requirements To Purchase A Home Or Condo
Home prices heavily depend on mortgage rates. As rates get higher, list prices generally get lower - but as they do, monthly payments rise alongside the interest rates. If you are prepared to purchase in cash, this gives you a leg up over competing buyers.
While each situation will be different, with good budgeting and a down payment of 20%, an income of around $132,600 can be sufficient for a median priced home on Oahu. That was $996,500 as of the the beginning of January 2024. At 6.5% interest rates, the estimated monthly mortgage payment would be approximately $5,050 per month. Add in taxes, insurance, and mortgage and it comes to around $5,525 per month, or around $66,300 annually.
On the condo side, an income of around $84,000 should be enough to purchase a condo of around $500,000 with a down payment of 20%. At 6.5% interest rates, the estimated monthly mortgage payment and maintenance fees would be approximately $3,500 per month, or around $42,000 annually.
These estimates are based on the prevailing interest rate of around 6.5% and assuming that the transaction is made with 20% down and little debt. Each and every financial situation is different - reading a blog post is no substitute for building a full plan for every dollar. Planning ahead and making a big down payment can really help. The higher your down payment, the lower your monthly payment will be. The lower your debt, the more likely you are to get good financing terms.
As the nation as a whole has seen food prices go up over the past few years, Hawaii has gotten closer to the average with a grocery index of 116.7. It no even longer holds the highest grocery cost index ranking - it now comes in at number two, behind Alaska.
Even so, most of the island’s supplies need to be brought in, making Hawaii quite an expensive state to buy groceries. While Hawaii is host to locally grown fruits, vegetables, and island grown coffee, we can’t grow enough to supply everything we need.
What I like to do is have a membership to Costco and a few other stores and check around to save on costs. Different stores have different baseline prices for certain items, as well as different periods at which those items go on sale.
To give you a better idea of grocery costs on Oahu, I’ve listed the prices of a few key goods below. This table is accurate as of early 2024, reflecting baseline grocery prices in Honolulu as reported by users.
|Price Per Unit
|1 Gallon of Milk
|$7.65 Per Gal
|12 Count Eggs
|$6.46 Per Dozen
|1 Lb White Bread
|$0.38 Per Oz
|1 Lb Bananas
|$0.11 Per Oz
|1 Lb Tomatoes
|$0.22 Per Oz
|1 Lb Potatoes
|$0.13 Per Oz
|1 Lb Onions
|$0.14 Per Oz
|1 Lb Chicken
|$0.39 Per Oz
|1 Lb Beef Round
|$0.62 Per Oz
Eating out on Oahu is something I love to do. Since Hawaii is a cultural melting pot of Asian, mainland and Pacific Islander influences, you have a ton of different culinary options at your fingertips in all price ranges. Eating out will typically cost more than on the mainland since food items are more expensive because most of it has to be shipped into the State.
Hawaii is also a global tourist destination so there are plenty of amazing culinary restaurants, but those experiences can come with high prices. The current average plate lunch is between $12 and $20, with the average cost of a casual lunchtime in the business district running around $22, including a drink. In sit down restaurants, it can run up to between $30 and $50 per person or more. Of course, these are highly variable and will depend on restaurant.
To check out more grocery prices and find out more about how I grocery shop with a plan, you can check out my video below on grocery shopping tips.
As of the latest data Hawaii has a Utilities score of 151.3. This puts it as the second most expensive state in the country for utility costs, behind Alaska.
Which makes sense, as the price of electricity in Hawaii is much higher when compared to much of the mainland, with Oahu coming in at 0.43/kWh. This is over double the national average of roughly $0.162/kWh.
Properties in Hawaii on the low end, such as small houses and condos, typically run about 500 and 600 kWh per month. This comes out to an electric bill between $150 and $250. In the more luxury focused areas, homes have an average usage of between 1400 and 1600 kWh. At 0.43/kWh, this can put the electricity bills over $600 per month. People in these neighborhoods often offset these costs by installing photovoltaic panels.
Natural gas is another area that comes at a premium compared to the mainland. If you only have a few natural gas services like a gas range, it can run very low - around $10 per month. For more luxurious properties with outdoor torches, natural gas bills can reach upper numbers of $250 per month or more, depending on the type of property and the amenities installed.
Water and sewage bills typicallly run between $90 and $140 on the low end, but for a property with a pool and nice landscaping that price can jump to between $200 and $300 or more.
Your cable and internet expenses will largely be dictated by where you live on the islands. In Honolulu, packages for fiber optic internet connections start at $39.99 for speeds of up to 300 Mbps, with cable TV packages starting at $59.99 per month. Pricing and availability tends to vary by neighborhood as you get further out so it’s important to check this for every home you look at.
If you’re a remote worker, rest assured that the internet on the island won’t let you down. Since our temperatures are very moderate throughout the year, you don’t even have to worry about losing access to the internet to severe weather events like an ice storm.
Overall, your utility bills can cost over $1,200 per month in addition to your mortgage payment. There are multiple ways to reduce these prices significantly. For example, you can install photovoltaic solar panels on your roof to reduce long-term electricity costs. Solar water heaters and other energy saving appliances can also be reduced to limit your electricity usage. HOA fees and maintenance fees need to be calculated for as well, which can be highly variable depending on the area.
And then we come to taxes.
Taxes in Hawaii primarily consist of General Excise Tax (similar to sales tax), Income Tax, and Property Taxes.
There is no sales tax in Hawaii, rather the state charges General Excise Tax (GET) at 4%. County governments can impose a surcharge on the state GET. The City and County of Honolulu has a 0.5% surcharge, making the effective GET rate 4.5%. The General Excise Tax is charged on all goods and services, unlike a sales tax which is usually only charged on goods.
Income tax rates in Hawaii remain unchanged heading into 2024, with the marginal rates ranging from 1.4% to 11% depending on the tax bracket. For example, a single filer with income of $150,000+ and married filing jointly with income of $300,000+ are taxed at 9% for all income over $300,000.
See the table below for the tax brackets and their marginal tax rates.
On Oahu, property taxes are paid in two installments during the fiscal year, which runs from July 1 to June 30. The first installment is paid on August 20, and the second on February 20, barring holidays. Payments can be made online, over the phone, in person, or through the mail.
For the fiscal year of July 1, 2023 to June 30, 2024, the owner-occupant residential property tax rate is $3.50 per every thousand dollars of assessed value. This means that if your home in Hawaii is your primary residence and the tax assessed value on that home is $1,000,000, then your property taxes for the year would be $3,500.If your home was assessed at $500,000 then your property taxes would be $1,750. It's possible to claim a homeowner's exemption if the property is your primary residence.
Owners below the age of 65 get a $100,000 exemption, while those above it get a $140,000 exemption which would help further reduce your property taxes.
Residential A categories are for non-owner occupant properties. Residential A properties assessed with values of up to $1,000,000 are taxed at the Tier 1 rate of $4.00 per thousand dollars of assessed value. Once they pass $1,000,000, the excess valuation is taxed at the Tier 2 rate of $11.40 per thousand dollars of assessed value.
Related: Understanding Oahu Property Taxes
Living in Hawaii can bring other costs with it that vary depending on your personal preferences, lifestyle, and family unit. Here are a few other things to keep in mind while you're building your budget.
Hawaii has great educational institutions for your children. The private schools on Oahu are particularly noteworthy, though there’s also a great selection of public schools. Private school tuition in Hawaii ranges from $12,280 to $60,000 plus, depending on the type of admissions and the school. Check out our guide to private schools on Oahu for a more in-depth look. Like the mainland, public education is generally free.
College tuition and fees vary significantly from campus to campus, with further variation depending on the program. That said, the average tuition & fees for Hawaiian colleges is about $5,021 for in-state students and $18,751 for out-of-state students.
Transportation is a significant monthly cost for residents in Hawaii as the state has some of the highest gas prices in the country. That's due to its remote location as all of the gas has to be shipped in. The most recent gas price I saw at the pump on Oahu for Regular, Plus, Premium, and Diesel was $4.539, $4.739, $4.989, and $5.587 respectively.
TheBus is Oahu's primary public transportation system with other options such as shuttle services also available. It's not a massive system like you'd find in a major city but it gets the job done for shorter distances. Gas may be expensive in Hawaii, but distances are smaller so you'll be driving less here compared to the mainland. So unless you're putting in a lot of miles driving around the island, which you'll realistically have no need to do, the higher gas prices are offset by fewer miles driven.
Distances aren't significant here but traffic remains a reality. Commuting during rush hour will require some patience but it will largely depend on where you live and where you're driving to. That’s going to have an impact on what you spend on gas so take that into account as well.
Homeowner's insurance will be a recurring expense but well worth it as it's going to cover damage from fires, natural disasters, theft, and other eventualities. It runs between $490 and $582 per year for a $250,000 baseline dwelling policy. This won't cover most homes in Hawaii, which are typically more expensive, so it's best to use it as a guideline - estimate roughly $1000 per $500,000 property value. Your final premium will vary based on several factors, and often hurricane insurance needs to be added in extra.
Healthcare insurance is a necessity and all employers are required to provide prepaid health care coverage to their eligible employees in Hawaii. This will typically include full-time employees and potentially some part-time employees as well. Check with your organization about eligibility. If you don't have coverage through an employer, you're able to purchase an individual health plan during the annual Open Enrollment period, with the average plan costing $400 per month.
Living in Hawaii requires the understanding that living here costs more than living on the mainland. Having a budget and a plan for every dollar spent is a good idea to start. If you can keep that in mind and stay open to the cultural differences, paradise has a place for you. Just keep in mind that Median Income data is just that - data. The more attention you pay to your finances, the better your chances of succeeding.
The Department of Housing and Urban Development (HUD) Guidelines reported that for Fiscal Year 2023, the Median Family Income for a 4 person family in Hawaii was $113,200. This ranges from $121,400 for families in Urban Honolulu on Oahu to $90,600 for families on Big Island in Hawaii County. The breakdown by county is below.
- Hawaii County - $90,600
- Honolulu County - $121,400
- Kalawao County - $119,800
- Kauai County - $102,200
- Maui County - $105,800
It all comes down to spending with intention, not wasting money, and knowing what you want to spend your hard earned money. A single individual making $90,000 per year can probably lead a comfortable lifestyle in Hawaii, assuming they have health insurance through their employer. With an annual income of $100,000 or more, some of the more expensive areas open up.
Couples with joint incomes between around $144,000 will likely find it more than sufficient for a lot of areas. As the family size grows, so too do the expenses - what you can afford from that point depends on the number of children you have, whether they're being sent to public or private school, pets, and other factors.
It can be feasible to live a modest lifestyle on Oahu while enjoying all that the island has to offer without breaking the bank. The following is an example estimate of the expenses that an individual or a couple with no kids could reasonably expect while living in a median priced condo with 20% down.
Assume that you're buying a median-priced $500,000 condo with 20% down at 6.5% and use air conditioning. Keeping in mind that this is a rough estimate that doesn't account for savings, a modest lifestyle in Hawaii would incur the following monthly expenses of around $5,508:
- Mortgage: $2,528
- Taxes & Insurance: $180
- Utilities: $500
- Maintenance Fees: $650
- Groceries, Necessities, and Entertainment: $1,100
- Transportation: $550
This budget estimate is rough, and should be used as a starting point for a full financial plan that is comprehensive to your needs, including savings.
A well budgeted and comfortable lifestyle in Hawaii for a family of four can incur monthly expenses of roughly $9,982. This assumes that you’re buying a roughly median-priced home for $996,500 with 20% down at 6.5% and use air conditioning. The estimate includes expenses for kids’ activities and dining out, with the kids enrolled in a public school, but does not include savings.
- Mortgage: $5,057
- Taxes & Insurance: $475
- Utilities: $650
- Groceries and Activities: $2,700
- Transportation: $1,100
This budget estimate is rough, and should be used as a starting point for a full financial plan that is comprehensive to your needs, including savings.
Hawaii is paradise. That much is known around the world. Between the gorgeous scenery and the fresh island air, life on the islands is amazing.
There isn’t a day that goes by for me after all these years that I am not taken aback by some of the natural beauty on a daily basis. The lifestyle is wonderful and relaxed. It’s a big reason why I never used my return trip ticket in 1999. The culture encourages meeting new people, caring for your community, and maintaining an active, healthy lifestyle - perfect for raising a family. I’ve lived here for 20+ years and I love it.
We rank high on various cost of living indexes, but it’s for good reason. Hawaii is a paradise like no other, offering gorgeous views, a healthy lifestyle, and a diverse cultural melting pot to those who seek it. It’s just about as close as you can get to living in a foreign country without a passport. If you are aware of the costs and spend your money with intent, you can easily do well here.