More Indians Buying Second Homes In Holiday Towns During Pandemic
The combination of work from home and no vacations during the pandemic has prompted more Indians to consider buying homes in holiday destinations.
For families who previously budgeted for and splurged on annual holidays, the options for such travel have narrowed down considerably, according to Santhosh Kumar, vice-chairman, Anarock Property Consultants. “The future is uncertain, and the paranoia is real. As a result, second home aspirations are now being dusted off and considered seriously.”
The Covid-19 disruption has made the market lucrative as real estate is cheaper outside big cities. And work from home offers an opportunity to spend quality time in places such as Goa and Lonavla to Shimla.
“Our enquires have increased more than 40% and bookings by 15-20% compared with last December,” said Bhushan Nemlekar, director, Sumit Woods Ltd. with a vacation home project in Goa. “There’s more demand for ready-to-move-in projects over the under-constructions ones.”
According to the data shared by property portal NoBroker:
- Second-home transactions involving wealthy and middle-class buyers—categorised based on the value of the transaction—rose 70%.
- Locations such as Nainital, Dehradun, Haridwar-Rishikesh area, Goa, Alibaug, and Lonavala are gaining traction for second-home investment.
- Demand for short- and long-term leases rose 10% after the Covid pandemic in major vacation towns.
Abhishek Bansal, executive director at Pacific Group, which is building Pacific Golf Estate in Dehradun, said 60% of the demand is coming from end-users and 40% from investors. “Second home properties like ours are becoming really popular hotspots for ‘workcations’ among the millennials."
Auramah Valley, a luxury residential township project in Shimla, has also seen a rise in inquiries and sales.
“People went to big cities, not for a better standard of life but to create wealth," said Manav Singh, founder of the project and chairman, Imperial Holding Pvt. "Now, given an option, if they can do the same job by staying in a place like Goa or Shimla, why would they not do that? Besides house that costs X in hills costs 3X in the city, so you save on the cost too," he said, adding that a second home is more a need now than a desire.
According to Anarock Research, average prices in major middle-class-favoured second home destinations range between Rs 3,000 and 12,000 per sq. ft. The average area of these homes starts at 2,500 sq. ft. and can extend to 10,000 sq. ft.
Second-home ownership was largely confined to wealthy Indians. Now, work from home is making middle-class Indians consider it as well, Kumar said. "A separate home office is an integral part now even as all other second home requisites of greener, cleaner surroundings, less cluttered remain the same.”
Those who either are not keen on buying or can't afford are leasing homes in holiday destinations. Availability increased during the pandemic.
Leases for holiday homes increased during the pandemic, said Amit Agarwal, Co-Founder and Chief Executive Officer, NoBroker. "With a reduced earning potential during Covid due to salary cuts and layoffs, we are seeing a spurt in people offering their villas and ancestral homes for short-term rental accommodation.”
Cheaper And Better Returns
According to Shveta Jain, head, and managing director-residential services at Savills India, land prices and rental values remain low in second-home locations and both buyers and renters want to avail the opportunity to own a home in much greener surroundings.”
The motivation to own a second home has been amplified as such investments yield superior returns compared to city homes, Jain said. “The emergence of online homestay aggregators and short-stay operators helped the investment cause leading to interest from traditional residential buyers who seek both capital appreciation and rental annuity."
The trend, however, faces a threat as vaccines raise expectations of a return to normal life earlier than anticipated.
“I would still believe the demand for second homes, wherever there is good social and medical infrastructure, will sustain," Nemlekar said. "But the initial euphoria will taper down, and then there will be a steady demand.”