HOLIDAY HOMES – HNI’S Propensity for Travelling to Exotic Places
As the World slowly returns back to its previous state, the luxury market is predicted to go up and increase significantly fuelled in-part by the high net worth individuals (HNI) and non-resident Indian (NRI) segments. According to a recent study which was conducted, 75% of HNI buyers intend to purchase residential real estate in the Country in the coming next two years, primarily in the major Cities and holiday destination thereby reflecting a strong and decisive turnaround in the segment of luxury real estate.
A number of real estate developers in India are already entering the holiday home market segment as wealthy look to buy their second homes in coastal or hilly locations due to the rising and increase in demand for vacation homes particularly in locations like Ooty, Goa, Coorg, Kasauli, Alibaug, and Manali.
Previous research indicated that 2021’s Q3 saw an impressive rise in home sales and new product launches due to digital technologies. There was a change and the Real Estate developers adopted to the virtual world thereby boosting the sales during pandemic. In addition to calling consumers during the pandemic, modern real estate developers offered various new services like virtual 3D tours, site visits, apartment management, digital payment integration, movers and packers, and other services that encouraged the NRI purchasers to make and push larger investments, thereby marking it as the year of recovery. People’s desire for luxury vacation homes, which has always been the case among the affluent class of people, did not change even during the third wave of the Covid. The main reason for purchasing properties during the pandemic was “Lifestyle Upgrade”, they said.
Post Pandemic Rush
Every person now prioritises living a healthy lifestyle, which has compelled them to choose for bigger and homes offering large spaces. Luxury houses are offered numerous extras like – private gardens, swimming pool, superior interiors, wide open spaces, lush green locality, serene backgrounds, to name a few and consequently, luxury housing became one of the most well-liked subsectors in the Indian real estate market. The banking sector realised during the pandemic that low loan rates would result in enormous success, therefore HNIs chose to invest in second houses with the mentioned luxury amenities, leading to phenomenal success in the luxury property market. People today choose to lead mindful, healthy lives, which includes working out and discovering new ways to enjoy life after a pandemic. One of the top most amenities that purchasers prioritise in the luxury house market segment are the day care centres and recreational places.
GOA Real Estate Hotspots.
Goa is segregated into two segments, North and South Goa. North Goa is a tourist destination whereas South Goa is a much quieter place. North Goa houses all the top restaurants, nightclubs and casinos that cater to tourists. South Goa is mostly recognized for its luxury hotels and resorts (For example – Lalit and Hyatt). In comparison to North Goa, South Goa is a quieter zone which has lesser developers, but they only serve locals. In terms of ratio, if 10 to 15 homes are built in North, then it would be 1 in South.
East Goa is the emerging neighborhood for the developers as it would also be closer to the new development — Mopa International Airport. The Rs 2,600 crore airport project will increase real estate demand in the Mopa region, greater North Goa, and the surrounding Konkan region in addition to driving tourists. Recent studies states that the average price of a square foot near the airport, which is currently Rs. 6700 psf, can increase by 27.8% over the course of a year. Property prices have increased on average over the last four years at a CAGR of 3.9%.
Speaking from the perspective of developers, Calangute, Candolim, and Baga used to be the center of the Goa market. There were clubs. Everyone who visited always did so to have a holiday experience in these places. Many window shoppers have turned into committed Goa real estate buyers because of the Work from Anywhere (WFA) idea. For rental purposes, people have turned to places like Siapem, Morjim, Porvorim, Parra, Vagator, Assagao, Saligao, Anjuna, and Siolim, where nightly rates can range from Rs 15000 to even Rs 100000 depending on the size and number of rooms in a villa. In general, nightly rates and occupancy have climbed by 25% to 30%, pushing yields up to 8% in some cases throughout micro markets. Asagao is one the hottest location which has the highest demand followed by Siolim, Saipem. Asagoa caters to the luxury segment. Other areas which few developers concentrate on is around Saipem, Pilerne, Reis Magos, Nerul, and Candolim. That’s their major ingress.
Who are buying in GOA?
Goa is not a location for natives when it comes to real estate, and it caters to visitors from other areas of the nation. HNI’s & NRI’s are the primary enablers in this surging demand in GOA.
Businessmen & Professionals as well as top management in the corporate service sector from places like Bengaluru, Hyderabad, Pune, and Mumbai, are the main drivers of this demand. The majority of customers are from Delhi, 40% from Mumbai and 30% from Hyderabad. They receive 25% of their business from Bangalore.
What GOA offers?
For India’s elite, purchasing a property in the popular tourist resort Goa was previously a goal. Since the pandemic began, a desire for a second residence outside of crowded cities has emerged. As more remote workers who can access their computers from anywhere, buy houses in Goa hence the price of second residences has skyrocketed since last year. Moreover, the need of quality air, water, food, proximity to a cross – cultural environment, and an overall improved lifestyle has drawn many homebuyers to Goa. A number of developers are offering villas in gated communities with carpet areas ranging from 1500 sq. ft. to roughly 4500 sq. ft., depending on the number of rooms, and average plot sizes ranging from 2000 sq. ft. to approximately 8000 sq. ft. in order to capitalise on the booming market. These villas typically range in price from Rs 3 crore to Rs 12 crore, depending on the size of the house, which shows extreme opulence. In fact, since the COVID-19 hit, demand for properties in Goa’s touristic and remote areas has increased three times.
Goa works on trends, where people are moving. More people are turning to buying homes in Goa in part because to the developers’ assistance with rentals when purchasing properties, which allows them to profit from their investment in a state different than their home city. Each builder in Goa has a distinct rental firm in addition to their parent company, which is followed by full maintenance for the buyers, making it easier for everyone to buy a property because they don’t have to spend their valuable time looking for renters. On the rents they offer, leaving aside additional costs like utility, maintenance, etc. that aren’t committed before the purchase, the actual return is a wide range, between 7 and 8% net (One of the best rental yields in India) from a ROI perspective. They don’t have a minimum guarantee system, which means that homeowners can prohibit access to their homes at any time of the year using a calendar, which prevents developers from marketing homes during that time. Few people make an investment because they anticipate their new property will increase in value over time. Villas are incredibly well-appreciated by developers. The developers don’t disclose precise data and they don’t make ROI% guarantees, but they might give clients an estimate in terms of hotel nights, such as 150 room nights per year at a price of ARR (Average Room Rate) 1, 00,000 per night. As a result, they consistently give a lower number in order to deliver more than expected and increase yield.
In the previous few years, demand in Goa’s micro markets has increased by 50%. Given the significant increase in demand for second houses in popular tourist areas and the lack of available inventory, Goan luxury real estate developer Sun Estates is negotiating to raise $50 million. None of the other cities have experienced the same level of growth as Goa as a popular second home destination.
WHY INVEST IN GOA REAL ESTATE
Emerging Holiday Homes Destinations
Along with Goa, Uttarakhand and Himachal Pradesh are also experiencing swift increase in demand for second homes. People are flocking to hill stations, to enjoy the untouched beauty of nature amidst luxurious amenities. As these destinations are just a few hours’ drive away from major cities in Northern India.
Following our investigation into the Goa Market, from the perspective of our organisation, our local expertise are everywhere in the nation, allowing us to walk with our customers at every stage of their journey if you’re looking to experience the Goa market. For more knowledge, please contact us using the information on our website (www.nklusive.in – a Premium & Luxury vertical of NK realtors)
………The author’s point of view is described above.
Senior Manager – Strategic Initiatives