Maui Condo Sales Drop as County Weighs Short-Term Rental Regulations

A proposal to phase out 7,000 short-term rentals in Maui already seems to be influencing the real estate market, with closings on condominium sales dropping by “double-digit percentages” since the mayor announced the plan. In March 2024, Maui County saw 93 condo sales; in July, that number dropped to 64, reports Brian Perry in Maui Now.

The bill would ban short-term rentals as an approved use in apartment districts, which would affect roughly half of the city’s STR listings. In May, Governor Josh Green signed a bill that grants Hawai’i counties power to set their own regulations and zoning laws for short-term rentals.

“Although too early to declare a long-term trend, the downturn could be an early sign of a cooling off in Maui’s hot real estate market that has put purchases of homes and condominiums beyond the reach of most long-term island residents.” However, condo prices only went down by 1.3 percent over three months compared to the previous year, while single-family home prices rose by 11.2 percent over three months.

According to Realtors Association of Maui President Lynette Pendergast, STR rules are just one part of a broader picture that includes interest rates and high home prices.

Maui Mayor Richard Bissen said, “These are desirable trends for local housing affordability, and we expect that these trends will intensify if the County Council approves the phaseout, making it cheaper for local residents and long-term rental landlords to buy these units.”