This was originally posted in 2006! Please be aware that building costs have gone up significantly since that time. Material costs are dynamic and labor costs rose substantially. Contact us to discuss rough estimates of current building costs.
Billy and I recently had the chance to hear Thomas Cook of TMC Construction talk about building costs on Maui. In general, Maui and Hawaii are always going to have higher construction costs than most mainland locations. Our higher construction costs are due to our location and labor costs. Transporting materials for construction is going to be higher since almost all of our materials are being shipped over considerable distances. The labor costs can be attributed to the state of the local construction industry. Needless to say, the real estate boom that occurred over the last 5 years has kept the islands contractors very busy. As a result, many are working well over 40 hours a week necessitating overtime pay. Cook indicated that overtime pay is part of the increase in labor costs, the other part can be attributed to an expanded labor pool. The high demand for construction workers has led to the hiring of a number of less skilled workers. The less skilled labor pool means less efficient construction projects with more man hours.
After discussing general issues that drive construction costs, Cook was asked questions about specific dollar per square foot construction costs in Maui.
The absolute lowest cost per square foot construction he was doing on island came in at $100 square foot hard cost for the contractors. This was on a project for Department of Hawaii Home Lands for native Hawaiians. This is no frills construction with no profit margin for TMC. Someone building a private home on island should not expect to get this low a cost.
A more robust but still relatively modest home is going to cost about $200 a square foot today. This will get you a place with a 30 year roof, mid range appliances and mostly carpeted floors with some tile.
The price range for a very well appointed home is about $350 a square foot. This would be a home with nice appliances, granite and other high end materials throughout.
The current cost for Wailea quality construction is running $600-$700 a square foot. For this cost, you might expect even higher end appliances, homes with pools or other water features, nesting doors and other high cost features.
The top of our market runs between $1100 and $1300 a square foot. This is the cost you might expect for the premier homes in Kapalua or along Makena’s oceanfront.
There were a few other things of note that Cook mentioned. West Maui is more expensive than other parts of the island. Transportation costs are higher as most of the island’s construction infrastructure is in Central Maui. Labor can also be more expensive with a fair number of the West Maui construction force coming from different parts of the island. Added travel time means higher labor costs. While he did not mention places like Hana specifically, it is safe to say that more secluded East Maui would be more expensive for the same reasons.
Cook also had some good insight on cutting construction costs. Cutting costs on construction projects is not always intuitive. All too often people who try to cut costs can be penny wise and pound foolish.
- Hiring the cheapest carpenter possible can be costly. What you may save in hourly rate may be made up for in wasted materials and hours lost to inefficiency.
- Cheap lumber is cheap for a reason. Warped lumber may require extra man hours to make it fit properly.
- Taking your time can save money. The more you push your contractors to get things done quickly, the more likely they will need to work overtime. More overtime equals higher labor costs.
It was good to have the opportunity to listen to Mr. Cook and get an update on current construction costs. Construction costs are dynamic. We will continue to monitor and post construction costs as data becomes available.
