Study shows Second Homes / Vacation Homes market gaining traction in India

A study conducted by Kapston.com an E-business consulting firm in India with second home companies HolidayHangouts.com, S & S properties, Wayanad Weekend Homes and Principal Gain along with real estate agents and buyers, shows second home and holiday homes market gaining significant traction in India.

The last few years have been exceptionally well for the Indian real estate market. Lower interest rates and increased buying power made people invest heavily on land and flats.
Those who invested in the real estate boom have been more than lucky. Those who missed the bus and are looking to take advantage, have a new avenue for investment. That is the Indian Second Home / Holiday Home/ Weekend Home properties.

The research also states that this trend will continue to rise, particularly in the already popular locations for holiday like Goa, Kerala, Wayanad, Darjeeling, Munnar, Ooty, Lonavla, KodaiKanal, Shimla, Khandala, Manali etc. says Ranjith Pavithran of Kapston.com.


In almost every popular location across the country, there is traction in buyers, sales and property price. As the demand increases, there are thousands of locations coming up as ideal second home location of your dreams. Leaving apart the most famous location, there are places which offer you the opportunity to purchase a property at a throw away price today. This means a strong ROI on your investment tomorrow. If you cannot buy a home at the city, then buying a second home may well turn out to be the second most important investment in your life.


Key Takeaways:

• Second home sales increased by 50% during 2002 – 2007.
• 54 percent of second homes are bought for recreational use like Vacations and Holidays.
• 32% second homes are bought as investment.
• Holiday homes on vacation, home stays for the rest of the year.
• Kerala is the most preferred destination in India for second home.
• Wayanad tops the list in Kerala.
• NRIs, the most potential customers for vacation properties.
• Second Homes account for 3-4 % of total home sales per year.
• HolidayHangouts.com is the leading holiday homes provider in South India and Disha Direct in the North.
• Sales of 2nd homes rose steadily during the past 15 years.
• Median age of second home buyers is 43.
  

Tourism is one of the critical industries to India’s economy, contributing a major chunk to its GDP. Longer-stay tourists prefer to stay in villas and condominiums over hotels. This is the major factor where Kerala score high over Goa as the biggest Second home market in India. Tourists come to Kerala to get themselves treated in Ayurveda. Usually an Ayurveda treatment takes weeks to months to finish. The climate and almost zero-pollution in Kerala helps too. The other factor works in favor of Kerala is its share of NRI population. For NRI’s these second homes doubles up as vacation homes as well as an investment opportunity with considerable growth potential.

The research predicts that this trend will more likely continue unless of course there is an economic downturn and demand abruptly tapers off. Another interesting point of India’s second home market is buying a second house in a different city near to office. If husband and wife are working in different cities, apart from the tax savings, to support their career and health, buying another home in another city makes more sense.

“There is a continuously growing segment of new buyers. In most cases development has kept up the pace with demand and in other cases it has surpassed it” added Prem Kumar of HolidayHangouts.com

Although this research is small in terms of scale and the no. of real estate agents, developers, buyers and owners quizzed, making it less authoritative, It does emphatically suggest with data that the popular second home / holiday home markets can offer better return on investment currently than most of your first homes or the first residential property adds Kapston.com.

The next real estate boom in India is holiday homes say Kapston's research. Kerala is the most ideal location for second home in India followed by Goa. Holiday property price soaring in resort areas across the country and buyers are increasing.