While the scramble to buy a home is a painful rite of passage for many in the metros, the upwardly mobile and affluent are being tempted by all manner of options when it comes to second homes. For some, it’s all about hitting ‘refresh’ at a weekend getaway, while for others, a second home is mainly a real estate investment. There are still others who want one as a post-retirement lifestyle choice.
Not surprisingly, the weekend homes segment is located in towns and cities that are a three- to four-hour drive, or even a flight, away from the big cities. Towns like:
- Lavasa, Lonavala, Pawna, Alibaug, Karjat, Goa, Nashik and Igatpuri are popular near Mumbai.
- Vacation spots like Mussourie, Kausali, Shimla, Ranikhet and Haridwar (for the religiously inclined) attract second home buyers in the north.
- In the south, Coorg, Coimbatore, Ooty, Wayanad and Puducherry, top the list.
Who is investing?
Experts point out that people in the upper-middle class and middle-class are earning more than ever before, accentuating their investment potential. That is perhaps why, as Rajatha Rao, head of retail and markets, Excellence4U Research Services, points out, the weekend homes market is growing at 10-12 per cent per annum.
Rao explains that “The growth of the Indian economy with considerable positive change in the lifestyle of people living in the metros, the increase in the number of HNIs, NRIs investing back home, tax benefits and the growing middle-class, has led to increased demand for vacation homes.”
Naturally, a majority of second home buyers are in the upper-income segment and are aged between 25 and 50. Some are even retired government officials who have disposable incomes of Rs 20-40 lakhs, adds Rao.
Time was when weekend homes meant bungalows and villas, and not many could afford these. Easy availability of finance through various institutions changed all that, shares Rahul Shah, CEO, Sumer Group. To cater to various tastes and increase the buyer/investor base, real estate developers are now creating spaces that suit the budgets of even the middle-class. “Buyers usually consider factors like pricing, space, proximity and amenities,” Shah notes.
Ramesh Nair, COO – business and international director, JLL India, says the holiday home market is now a full-fledged real estate segment. “Just like it is for first homes, the demand for second homes is also driven by the general economic climate. When the economy declines, all real estate segments decline with it. On the flip side, demand for second homes rises when people’s spending power increases.”
Nair believes that the time is right to invest in a vacation home. “There is a healthy supply of second home projects that have come up in the last two years. There is therefore, a wide choice. However, the market for second homes is slightly inflated now. So, circumspection and an understanding of one’s actual requirements is necessary to strike a good deal,” he cautions.
For some like Sarathi Mishra, a businessman from Mumbai who bought a 3-BHK in Seawoods, Navi Mumbai, owing a second home means leaving his cares behind while heading for his apartment in the satellite city. “The area is green compared to Andheri and our flat has a sundeck, where we nurture plants. The building has a garden and a huge compound, which is very relaxing for my family. We have kept bicycles there and enjoy riding on weekends,” says Mishra.
Tips for second home buyers
- The valuation of your home should be an investment buffer for any kind of urgent financial needs.
- Do not expect rent to be at par with a property in the city. However, you need to consider your EMI and maintenance costs while fixing the rent.
- Ensure that your second home has facilities such as water, electricity, sewage disposal, road accessibility and a hospital nearby.
- It is best to buy a second home from a reputed developer.