Between 2006-2008, I posted fairly regularly on new development news on the island. A lot of this news was focused on the luxury segment as there were four major luxury condominium developments that were planned for Maui. If you read the blog on a regular basis, you may have noticed that my new development posts have been a lot less frequent over the last year. The global financial challenges and tight credit markets put the brakes on many of the island’s proposed luxury projects. Today’s Maui News has an article providing an update on various projects including Maluaka in Makena, Baccarat Wailea and the Villas at Royal Lahaina. Maluaka is being scaled down drastically from a 71 unit condo development to 13 luxury home sites. Royal Lahaina currently has its new luxury project on hold until economic conditions improve. The Baccarat project has been canceled with the future of the project site unknown at this time.
The Ritz-Carlton Club and Residences is the one luxury condo development that was actually able to finish construction. The newest luxury offering in Kapalua opened officially at the end of May. This luxury property offers 62 time share residences and 84 whole ownership condominiums. This were the furthest along in the construction process when the worst of the financial crisis hit. Despite having construction almost completed, the developers had their share of anxious moments. The now defunct Lehman Brothers provided the resort with their lending and they were left scrambling to find the financing necessary to complete the project. Now that they have completed construction, they find a sales environment with fewer potential buyers, but a lot less competition than what they would have faced.
While the financial crisis has caused a good deal of pain for developers and investors backing the proposed luxury developments, the delay and/or cancellation of Baccarat, Maluaka and Royal Lahaina Villas may ultimately be better for the health of the Maui luxury real estate market. The sheer volume of new luxury condos planned at these three developments threatened to flood the market with inventory and dilute values. As it stands, there is still plenty of new luxury inventory to choose from between the Ritz, resales at the Wailea Beach Villas and resale and new developer offerings at complexes like Ho’olei and Papali Wailea. Contact us today if you are in the market for a luxury condo or home on Maui. We are happy to offer our assistance.
