The demand for second homes is gaining momentum
opinions expressed by entrepreneur Contributors are their own.
You are reading Entrepreneur India, an international franchise by Entrepreneur Media.
COVID-19 has transformed the country’s real estate sector and turned the housing market upside down. One of the unexpected effects of the virus is a surge in demand for second homes.
The combination of improved housing affordability, pandemic-era savings, health, hygiene and wellness concerns, a hybrid work revolution, the need to diversify investments, and favorable real estate policies are fueling demand for a second home or vacation home. That being said, the pursuit of a balanced and healthy life continues to drive demand as home buyers seek a pollution-free and holistic living environment.
By the way, the concept of the second home has gained in importance in the last decade. With the lockdowns and travel restrictions during the pandemic, more people have warmed to this idea. But for other reasons. While some bought a second home just to diversify their wealth, others chose it because they saw it as an attractive investment option for higher capital appreciation than city homes, as well as rental income. As holiday homes are usually only used for short periods, they can be rented out to host families and tourism companies when not in use by the owner.
Some have bought it as a home from which to work or vacation without uprooting their lives. The coronavirus pandemic has pushed apartment dwellers to seek more space and nature outside of the city. It also freed them from their downtown jobs. With work culture still gravitating toward hybrid and work-from-home models, vacation homes have become a popular choice among buyers. These homes provide stress relief for the issues of post-pandemic life, allowing people to truly rejuvenate on their property and relax in peace whenever the need arises.
It has become a lifestyle choice for the ultra-rich and many upper-middle-class families. Millennials and Gen X are looking for penthouses, condos or villas in gated communities that offer open spaces, scenic views, good broadband connections, security and state-of-the-art amenities such as swimming pools, gyms, spas and health centers. They want to honor the limited sense of community that the virus has forced everyone into isolation for a long time.
Far away from densely populated cities, these houses also offer extended families and sometimes groups of friends a retreat for a safe holiday. These homes have become more appealing than a hotel or a resort as their surroundings offer opportunities to explore without having to worry about social distancing, contribute to a better work-life balance and allow them to spend quality time with loved ones while ensuring productivity work.
Demand for second homes or vacation homes is being driven by high net worth individuals, expatriates, nonresident Indians and corporate executives. People with steady incomes and savings but who work remotely also prefer to spend their money in spacious holiday homes surrounded by green vegetation.
Buyers interested in acquiring a second home are looking for a picturesque destination that is easily accessible within a few hours’ drive from the cities. The short travel time enables them to use their second home more often. The strategic location of the property allows the buyer to be in close proximity to basic amenities such as grocery stores, hospitals, etc. and robust social infrastructure.
While property in exotic resort towns across India such as Goa, Alibaug, Lonavala, Coonoor, Kasauli in Himachal Pradesh and Ooty in the South is attracting buyer interest, demand is increasing across the country, particularly in resort areas close to major cities. To the north, hill stations like Shimla, Dehradun, Nainital and Mussoorie are gaining acceptance and to the east, North Bengal and villas along the banks of the Ganges in West Bengal are attracting much attention. Non-metropolitan cities that enjoy a healthy climate and wide access to nature through their proximity to the sea, countryside, mountains or a combination of both have also become a preferred investment choice for second home buyers.
The resurgence in demand for vacation rentals has attracted the attention of developers, some of whom are looking to invest in this segment in Tier II and Tier III cities. Brand brokers who have the expertise to develop luxury weekend getaways have launched projects on the vacation home concept. Villas and studio apartments are also being developed in the Dooars as well as in the mountain areas of Darjeeling and Sikkim. To improve the buyer experience, developers also plan to offer concierge services in some of their vacation home projects.
Although real estate prices are slowly rising, the market for second homes has not dried up. Demand for second homes remains well above pre-pandemic levels and the industry expects high interest in vacation rentals to increase in the coming years.