Young buyers choose ROI over holiday potential in second homes
Source: Times of India ( https://bit.ly/2YmxvF8 )
Your first home is where you live full-time—it is not an investment that you would earn from in the short term. With the Indian middle class and upper-middle class making more than ever before, second homes have continued to be a rage even during the pandemic. In many ways, the pandemic has pushed people to invest in a second home away from the city’s concrete jungle.
Location of second homes
Whether you are hoping to holiday at your second home or rent it out, the property’s location is of utmost importance. Trends dictate that Indians invest in second homes at places like Goa, Igatpuri, Manali, Darjeeling, Shimla, Ranikhet, Ratnagiri, Kovalam, Munnar, Coorg, and Ooty. Wherever you may be living in India, a second home in a locale like Goa has much to offer you. With its clean beaches, sunny weather, and hospitality par excellence, Goa provides much more than a second home; it gives you the chance to own your dream.
What are Indians looking for?
When buying a second home, statistics show that people from metropolitan cities like Mumbai and Pune are first in line to invest in a sylvan retreat away from home. However, the primary purpose behind buying a second home is not to use the property for periodic holidays—this seems to be an added advantage that makes the deal more attractive. What people are actually looking for is a solid return on investment (ROI).
According to a recent survey by think-tank:
With over 72% of second-home buyers emphasizing the potential of property appreciation and ROI, homes in locations like Goa are in more demand than ever before.
Conventionally popular destinations like Goa, Lonavala, and Ooty are in greater demand than lesser-known locales as over 78% of buyers are keen on owning a secure investment that can give excellent ROI.
From beach-lovers, a whopping 74% prefer Goa as the location of their second home.
60% of second-home buyers are salaried professionals, while the rest are from the world of business or self-starters.
There is an increasing demand for villas over apartments, and buyers would rather spend a little more on a villa with good rental potential than on an apartment in a crowded area.
With most buyers coming from the 25 to 50-year-old segment, the demand for second homes that offer solid ROI is being driven by young Indians who are not making sentimental choices when it comes to property investments. The goal for these home buyers is to create a second stream of income through rent and gain property appreciation.
Another visible trend in the real estate market is the increasing number of second home purchases made by NRIs. As per CII-Anarock’s Real Estate Vision 2025, a whopping 38% of Indian property buyers are NRIs. Besides pandemic anxiety, other factors that influence real estate buying behaviour amongst NRIs are low interest rates, cuts in stamp duty charges, weaker rupee value, and attractive rental management offers.
If one can purchase a well-managed villa in Goa as a second home, using it for personal holidays seems to be an added advantage instead of the buyer’s primary focus. The demand for higher-ROI second homes has continued to create real estate potential. Avant-garde real estate developers have stepped in to fulfil this demand and there are many upcoming projects that home buyers can choose from.
Aspects like a great location, proximity to practical facilities, a popular destination, and prospect of steady rental income have always been factors that people have considered. The expected ROI has now become the most attractive component for buying a second home.