The developer of a planned Makiki condominium tower hopes to start construction this fall after opening a sales office on Sunday for the 176-unit project, about half of which is reserved for local resident buyers with moderate incomes.

About 40 prospective buyers received applications on Sunday after being approved for a mortgage loan, giving the project a decent start in a sluggish real estate market that has proved challenging even for "affordable housing" projects.

"It went pretty good," said Serge Krivatsy, a principal with project developer THM Partners LLC. "We're off to a good start I think."

The planned tower called Holomua is slated to be built at 1315 Kalakaua Ave. near South Beretania Street.

Under a state planning law that allowed the developer to build the tower 220 feet high, or 70 feet above the neighborhood's normal 150-foot height limit, at least 51 percent of the units (90 units) must be reserved for Hawai'i residents who intend to live in the unit and earn no more than 140 percent of Honolulu's median income.

The 90 units are priced from $245,000 to $409,900, and range from 354 square feet to 705 square feet with one to two bedrooms and one or two bathrooms. The median income limit equates to $88,820 for a two-person household or $111,020 for a family of four under federal and state guidelines.

Holomua's market-priced units range from $353,400 to $499,999, and range in size from 513 square feet to 752 square feet with one to two bedrooms and one or two bathrooms.

To obtain construction financing, the project must obtain a certain level of sales commitments. If that level is achieved and financing is obtained, construction could start in the fall and be completed in early 2011.

Krivatsy declined to specify the level, but said he is optimistic that there will be enough interested and qualified buyers to move forward.

Weakness that emerged in O'ahu's housing market last year has proved challenging for several new or planned high-rise condos — including some, but not all, affordable-housing projects.

One midpriced project planned not far from the Holomua site was derailed last year after not enough buyers materialized for the developer, San Francisco-based SPE Construction doing business as Island Paradise Investments LP.

That project, dubbed 1723 Kalakaua Ave. after its location in Pawa'a near the Hawai'i Convention Center, opened a sales office in March 2008. The developer needed purchase commitments for 90 of the project's 120 units, but never began construction after failing to obtain financing.

Prices for 1723 Kalakaua were forecast to be from $292,500 to the low $500,000s. The units were to range from studios to two-bedrooms, with 407 square feet to 703 square feet of living space.

But another moderate-priced high-rise project in Salt Lake called Country Club Village 6 managed to sell out in January, after converting enough sales from reservations initially made in late 2007.

"It was a complete sellout," said Vito Galati, one of the partners that developed the 17-story project with 269 units priced from $218,000 to $397,500.

Krivatsy of Holomua said about 100 people on Sunday stopped by the sales office at 1415 Kalakaua Ave., Suite 1401. Of the roughly 40 people qualified for a loan by Central Pacific HomeLoans, about half were interested in the market-priced units and half were interested in the affordable units.

For the affordable units, which have certain provisions that govern resales and keep the price affordable for 10 years, applications are being accepted until July 7. By state law, a lottery must be held to select buyers for the affordable units.

Krivatsy said THM tried to keep prices as low as possible given the fizzled demand for higher-end condos and tight financial markets making it more difficult for people to obtain mortgages. "We were worried about the depth of the market," he said. "We were pleasantly surprised."