While the broad housing market is searching for signs of a sales pick up, the vacation homes segment has done well, driven by demand from wealthy industrialists, high net-worth individuals (HNIs) and non-resident Indians (NRIs).
“The vacation home market in India is growing at 10-12% per annum. This is because this market follows a different dynamics and is immune to slowdown affecting the real estate sector in general. Due to the rise in number of HNIs and a desire to have a second home for leisure and relaxation, this market is showing signs of steady growth,” said Ashwinder Raj Singh, CEO Residential Services, JLL India.
According to Singh, vacation homes comprises 5-7% of the total home sales in the country, and places such as Goa, Shimla, Kerala and areas around Mumbai like Lonavala and Khandala are the most preferred locations.
Mumbai-based EMGEE Group is developing two projects in Goa, the most favoured leisure address. The developer is building a gated community apartment and villa project ANANTAM, spread over 12.5 acres at Dona Paula in Goa. The developer has roped in Gauri Khan to design 12 limited edition villas at its seaview bungalow project Naira at Bambolim in Goa.
“At ANANTAM, we have already sold 85% of the homes, and interestingly only 5% of buyers have opted for home loans.This clearly indicates that the buyers are affluent,” said Mudhit Gupta, MD, EMGEE Group. “Apart from NRIs, who are buyers of 50% of the project, we are also seeing interest from businessmen and professionals from Bengaluru, Delhi and Mumbai.”
Puranik Builders recently launched the second phase of its 3.5-lakh-sq-ft villa project `Puraniks Sayama’ spread over 10 acres in Lonavala, with a rise in price. “We have launched our second phase with a 15% increase in prices and the market has responded well as sales velocity in second phase is outpacing the first that we have already delivered,” said Shailesh Puranik, MD, Puranik Builders. “Apart from NRIs with Mumbai and Pune as their hometown, buyers from Mumbai and Pune are buying, given Lonavala’s proximity to both the cities.”
According to Om Ahuja, CEO Residential, Brigade Enterprises, vacation homes‘ demand in Mysore and Chikmagalur, where the company has four second home projects, has been good. “This trend has increased our confidence to launch three more projects in Mysore in the coming months,” he said, highlighting that the company’s project in Chikmagalur is 90% sold out, while another in Mysore has been 80% booked. Rising income levels and an aspiration for better lifestyle is driving Indians’ decision to buy vacation homes.
“Given the size of spending, it must appeal to reason and logic as well. Therefore, the demand for these products is slow and steady rather than large volumes of quick sales. We do about four to five units of sales a month,” said George Menomparampil, MD, Zion Hills, which has a weekend home project close to Kolar near Bengaluru. The developer has already sold the entire first phase of 250 villas. The opportunity is enticing for large developers too. “Entrepreneurs, HNIs, NRIs and CEOs of top MNCs within the age bracket of 35-50 with high disposable incomes are driving the demand for this segment,” said Brotin Banerjee, MD & CEO, Tata Housing, which is developing a project in Kasauli and buyers here are NRIs, CEOs & CXOs of leading companies and SME owners.
According to an estimate, about 2 million customers in India are ready to buy a vacation home, provided they get the right product in a location of their choice. About 85% of this demand would be for houses within Rs 50 lakh or below.
The premium and luxury segment prefer locations like Lonavala, Kasauli and Goa and the budgets here range anything between Rs 50 lakh and Rs 2 crore.
PS: We at PropGod have launched Sai Pratham, an affordable villa project ideal for second/vacation home or senior citizen housing seeker in Whitefield at Bangalore.