Demand For Second Homes Is Gaining Traction Demand for second homes still remains well above pre-pandemic levels, and the industry expects the high level of interest in vacation homes to grow in the coming years
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COVID-19 changed the country's realty sector, upending the housing market. Among the unexpected impacts of the virus is the spike in demand for second homes.
The combination of enhanced housing affordability, pandemic-era savings, health, hygiene and wellness concerns, a hybrid-work revolution, need to diversify investments, favourable realty policies is fuelling demand for a second home or vacation (holiday) home. These apart, the aspiration to have a balanced and healthy life is driving the demand further as home buyers look for a pollution-free and holistic living environment.
Incidentally, the concept of a second home started to gain traction in the previous decade. With the lockdowns and travel restrictions during the pandemic, more people have warmed up to this idea. But for different reasons. While some bought a second home simply to diversify their assets, others choose to do so because they considered it as an attractive investment option for higher capital appreciation compared to homes in metros as well as for rental income. Since vacation homes are typically used for short spurts of time, they can be rented out to homestays and tourism businesses when not in use by the owner.
Some purchased it as a home from where they can work or vacation without uprooting their life. The coronavirus pandemic has pushed apartment dwellers to seek more space and nature outside of the city. It also untethered them from their downtown workplaces. With work culture still trending toward the hybrid and work-from-home models, holiday homes have become a popular choice among buyers. These homes provide stress relief to the woes of post-pandemic life as well as enable individuals to truly rejuvenate and unwind in tranquillity at their property whenever the need arises.
For the ultra-rich and many upper middle-class families, it has become a lifestyle choice. Millennials and Gen X are seeking penthouses, condominiums or villas in gated developments which offer open areas, scenic views, good broadband connectivity, security and state-of-the-art amenities like swimming pool, gymnasium, spa and health centre. They want to cherish the limited sense of community living as the virus had forced everyone into isolation for a long time.
Located far away from densely packed metro cities, these homes also offer an escape abode to extended families and sometimes, to groups of friends to holiday safely. These homes have become more appealing than a hotel or a resort as its surroundings provide avenues for exploration without having to worry about social distancing, helps strike a better work-life balance, and enables them to spend quality time with loved ones while assuring productivity at work.
The demand for second home or vacation homes is driven by high net-worth individuals, expatriates, non-resident Indians and C-suite corporate professionals. Individuals with steady incomes and savings but working remotely are also preferring to spend their cash on spacious vacation homes set amid verdant greenery.
Buyers' keen to purchase a second home cherry-pick a picturesque destination that is easily accessible within a few-hour drive from cities. The short travel time enables them to use their second home more frequently. The strategic location of the property allows the buyer to be in close proximity to basic amenities such as grocery stores, hospitals, etc. and a robust social infrastructure.
While properties in exotic vacation towns across India like Goa, Alibaug, Lonavala, Coonoor, Kasauli in Himachal Pradesh and Ooty in the south are seeing a lot of buyer interest, demand is trending up throughout the country, particularly in resort areas near major cities. In the north, hill stations such as Shimla, Dehradun, Nainital and Mussoorie are gaining acceptance and in the east, North Bengal and villas along the banks of Ganges in West Bengal are drawing a lot of attention. Non-metro cities that have a salubrious climate and ample access to nature through its proximity to either sea, countryside, mountains or a combination of them all, have also become a preferred choice of investment for second-home buyers.
The resurgence in demand for holiday homes has caught the attention of developers, some of who are looking to invest in this segment in tier II and tier III cities. Branded realtors who has the expertise to develop luxury weekend getaway properties have been launching projects on the holiday 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 enhance buyer's experience, developers are also planning to offer concierge services as well in some of their vacation home projects.
Though home prices are slowly inching upwards, the market for second homes hasn't dried up. Demand for second homes still remains well above pre-pandemic levels, and the industry expects the high level of interest in vacation homes to grow in the coming years.