The Future of Ultra-Luxury Real Estate in Lanikai and Kailua, HI

The Future of Ultra-Luxury Real Estate in Lanikai and Kailua, HI

Renowned for stunning beaches and breathtaking scenery, Lanikai is a beachside paradise on the eastern side of Oahu. It offers an idyllic island lifestyle with a close-knit community and relaxed atmosphere. With year-round warm weather, there are always plenty of outdoor recreation and water activities. Lanikai real estate features luxury properties, grand mansions, and multi-million dollar homes, making it a highly sought-after neighborhood.

While Lanikai is a primarily residential area, it’s part of the bigger town of Kailua, where residents can access convenient amenities. There are shopping centers, farmers’ markets, and trendy eateries. The Kailua Town Center has a grocery store, numerous boutiques, restaurants, and the Lanikai Brewing Company. You’ll also find two golf courses, the Mid-Pacific Country Club and the Royal Hawaiian Golf Club.

Homes for sale in Kailua range from secluded beachside homes to resort-style condominiums. It remains one of the most prestigious communities in Oahu. Read on to learn more about the future of ultra-luxury real estate in Lanikai and Kailua, HI.

Rising demand for luxury real estate

With the federal interest rates rising, home sales may have seen a downturn overall. However, this is different with exclusive, high-end real estate. In 2022, sales of residential properties for three million and up more than doubled compared to their pre-pandemic levels in 2019. And it’s predicted that demand for ultra-luxury properties in Lanikai and Kailua will continue growing in the future.

The allure of a prestigious coastal lifestyle combined with the privacy and seclusion of Lanikai and Kailua attracts wealthy newcomers from all over the world. With Covid restrictions lifted, foreign investors are coming back. A list of destinations for global home buyers puts Hawaii on top, with 20% of international buyers expressing interest. Lanikai’s and Kailua’s proximity to Honolulu is an advantage for those looking to be close to a metropolitan area and entertainment.

Hawaii’s highest-priced luxury homes

Lanikai and Kailua are not just among the most desirable locations in Oahu, they’re also the most expensive, second only to Honolulu. Two of the top ten most expensive homes in Oahu are in Kailua, both priced at over $20 million. The top three and top four are located in Kailua’s Beachside neighborhood and are the most expensive single-family homes on the island. The first two are penthouse condominiums in Honolulu.

Among the more recent highest-priced sales in Oahu were in Lanikai. Last year, the first $10 million-plus sale was an oceanfront property on Mokulua Drive. The five-bedroom main home comes with a five-bedroom guesthouse. The year before, the most expensive home sale was a beachfront home sold for $24 million, the highest price on O‘ahu in over 15 years.

Population growth 

Oahu has witnessed steady and continuous population growth over the past few decades. According to the 2020 census, its population topped one million for the first time. With a growth rate of 6.6% between 2010 and 2020, it outpaced all the other Hawaiian islands. Maui, which was first in growth rate in the previous 20 years, came a close second at a 6.4% growth rate between 2010 and 2020.

As Waikiki and Honolulu become more dense and populous, residents and newcomers are looking for more secluded locations with small-town atmospheres, such as Lanikai and Kailua.

They are drawn to a quieter, less touristy beachside lifestyle and higher standards of living. So the population in the area grows alongside Honolulu’s. This upward trend is projected to continue. With more people moving to the island, housing demand will remain strong.

Limited housing inventory and construction

Lanikai and Kailua feature a mix of luxury beachfront properties and already-established upscale residential neighborhoods. Beachfront locations are very limited, and residents want to maintain the exclusivity of existing neighborhoods. So there’s a collective effort to preserve the area’s unique character and limit new development projects.

In addition, the topography means there’s limited land available for new housing. Zoning and development regulations regarding building heights and density restrict the number and size of new housing and construction. There are also concerns about overdevelopment, crowdedness, and increased traffic that restricts and prevents new development projects. In addition, Lanikai and Kailua residents actively preserve wildlife and open spaces to maintain the natural beauty of their surroundings.

With a limited supply of homes for sale in Lanikai and Kailua, there are more buyers than homes available. In the highly competitive luxury market, the high prices are meant to attract only the wealthiest and most elite buyers. The limited inventory allows sellers to set even higher prices. Interested buyers end up submitting offers above the asking price to outbid each other, knowing that the availability of luxury real estate will remain scarce.

Luxury real estate rentals have become more popular

In addition to their prime location, luxury properties in Lanikai and Kailua often come with a range of high-end amenities and features. Many have direct beach access, private pools, outdoor living spaces, plush furnishings, and modern fixtures. Tourists and visitors are willing to pay higher rental rates for a more luxurious vacation experience.

The growing popularity of rental platforms and online booking services, such as Airbnb and VRBO, make it easier for homeowners to list their properties for short-term and long-term rentals. The services are also attracting a broader range of travelers who are able to search for properties that meet their specific needs and preferences.

The popularity of luxury real estate rentals in Lanikai and Kailua has also attracted investors looking, looking for promising opportunities. The potential for high rental yields, steady income, limited supply, and home value appreciation in desirable locations appeal to investors who know they can benefit from capital gains and a more diversified portfolio.

Learn more from an experienced real estate agent

The real estate market in Lanikai and Kailua is fast-paced and dynamic. If you would like to learn more or have any questions, contact Alesia Barnes. Affectionately known as “Ms. Aloha,” she is one of Hawaii’s top real estate professionals. As an agent and broker, she represents buyers, sellers, and investors interested in luxury real estate.



Alesia’s marketing and advertising expertise, network of connections, industry partnerships, superior market knowledge, and exclusive client base have rocketed her into the Top 25 REALTORS in Hawaii.

Follow Me on Instagram