Increasing Penchant for Second Homes - One is Not Enough: Savills
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SEPTEMBER 2021
One is Not Enough:
S P OT L I G H T
Savills Research
Increasing Penchant for
Second Homes
One is Not Enough: Increasing Penchant for Second Homes
Prologue
Across societies, at different times, appears to have created several resets in
people have invested in additional real estate. Several aspirational buyers KEY TAKEAWAYS
homes that are neither their regular appear to be evaluating alternate and
residences nor meant for steady income additional homes, as the market seems
streams. Occasionally, such homes serve to be providing value-based investment
both these purposes. Such properties opportunities. But there are deeper
could be one or any number of motivations and thought processes
2 cr & 2 Years
ownerships, subsequent to the primary at work, which we have endeavored
residence. The meaning contained to uncover through a survey carried • 7 0% of overall demand is for properties
priced within INR 2 cr.
within the phrase ‘second home’ is out during June-July 2021. It is to be
therefore quite extensive. In this report, noted that we focus only on the tastes • Majority of the respondents (70%) are
looking to invest in a second home in the next
and in general, these additional homes and preferences at this stage, without 2 years.
are called “Second Homes”. The driving dealing with the tax and financial
factors for such purchases are many, perspective of second home purchase.
ranging from the need to create an asset
In addition to highlighting the key
pool, diversification of investment,
factors, we have endeavored to map the
future residence planning, lifestyle
second homes market in the country,
choices, or holiday and staycation
focusing on select locations. The favored
homes.
locations, investor insights and expected Gated Communities
In the current times, second homes have trends are based on real inputs obtained • P
reference for gated communities is higher
again come to the fore as the pandemic from respondents. as compared to non-gated communities.
• Buyer interest in independent houses,
bungalows and farmhouses increase
moderately in higher price brackets.
Top Selection Criteria
• Holiday destination
• More space
• Wellness
Location Preferences
Table of contents • D omestic: Goa, Lonavala, Dehradun, Shimla,
Alibaug
Prologue 03 • International: London, Dubai, Portugal,
Introduction 04 Scotland, Canada
Second Home Market: Insights and Survey Analysis 05
-2X2 purchasing trend
-Holding period
-Amenities
-Gated communities are the clear winner
- Location preferences
Holding Period
Location Profiling 12 • Almost 80% of potential purchasers intend to
hold the properties for more than 5 years.
Afterword 22
Acronyms and References 24
savills.in 2 3
One is Not Enough: Increasing Penchant for Second Homes One is Not Enough: Increasing Penchant for Second Homes
The Motivational Factors
Driving ForceBestfor Second Homes
affordability in 2.5 decades
60 Government support towards housing has helped improve affordability 16.00
Property Value (Rs. 100,000) &
14.00
Annual Income (Rs. 100,000)
50
The demand for second homes emanates Factors Enabling Decision Making
from a variety of factors that have caused 12.00
40 fundamental shifts in the industry over
Affordability
time. Driven by wider acceptance of work 10.00
from anywhere and increasing advent
30 of organised as well as professional 8.00
22.0players in this segment, latent demand Organised
Digital sales Staycation and
for such properties have surfaced in supply and 6.00
platforms income
20 15.6 times. Reputed players such as
recent broad spectrum
offering wide generation
Vista Rooms, Luxury Escapes, Amã Stays of prices 4.00
11.1 choices
and Trails by
8.3Taj to name a few offer end
10 6.6 5.9
2.00
to end property management 5.3 services
5.1 4.7 4.3 4.7 5.0 5.1 5.1 4.5 4.7 4.8 4.6 4.7 4.6 4.4
4.1 3.8 3.7 3.5 3.3
and hassle-free hosting for property Professional
Rising Rebound in management0.00
and
0 owners in offbeat destinations, providing affordability tourism operators
assured periodical return on investment
2001
2011
1997
2003
2013
1996
2006
2016
2000
2002
2010
2012
2020
1999
2009
2019
1995
2005
2015
2004
2014
2007
2017
1998
2008
2018
opportunities. Not to forget technological
advancements that have enabled sales
worldwide andProperty
led to emergence
Costof Affordability Annual Income
aggregators and operators enhancing
the income generation
Representation of property ability of such
price estimates Affordability equals property prices by annual income
properties. Source Savills India Research
Affordability Driving Residential Housing Market in India
Best affordability in 2.5 decades
Improved affordability
60 Government support towards housing has helped improve affordability 16.00 is one the major key
demand drivers of second
Property Value (Rs. 100,000) &
14.00
Annual Income (Rs. 100,000)
50 homes. Though the
12.00 property costs have been
40 rising over a period, so
Affordability
10.00
is the affordability due
30 8.00 to rising income and
lower interest rates. It is
Introduction
22.0
6.00
20 15.6 believed by the banking
11.1 4.00 industry that the recent
8.3
10 6.6 5.9
5.3 5.1 4.7 4.3 4.7 5.0 2.00 times are the best with
5.1 5.1 4.5 4.7 4.8 4.6 4.7 4.6 4.4 4.1 3.8 3.7 3.5 3.3
respect to affordability
0 0.00 over the last 25 years.
“Second Homes” as a concept can be offering curated products at various steadily. Among many reasons driving this
2001
2011
1997
2003
2013
1996
1999
2000
2002
2006
2016
2009
2010
2012
2019
2020
1995
2005
2015
2004
1998
2007
2014
2008
2017
2018
traced back to the pre-British period in price points. Additional property phenomenon is better scope for capital
India. Even in independent India, the management services for regular upkeep appreciation.
trend of buying additional homes, whether and maintenance, securing potential Property Cost Affordability Annual Income
The demand for vacation homes has
for self-use or as investments, has been clientele for properties meant for renting, Representation of property price estimates Affordability equals property prices by annual income
witnessed an upward trend in these
fairly common among the financially customised landscaping, bespoke
turbulent times. While international
secure sections of population. interior designing, etc., have become Source HDFC
travel plans have been put on hold during
distinguishing factors in the market. The
A noticeable change in the post-GFC 1
the pandemic, a relaxing stay at a scenic
transition to an approach focused on
period is the emergence of organised domestic location does seem to have Interestingly, the recent surge in demand basis2 . Occupancy rates have improved in the untapped potential and are continuosly
capital appreciation and rental yield has
market for second homes in the country. caught people’s fancy, thereby creating a of second homes can also be attributed to premium staycation homes as well. Popular scouting marquee properties across the
also been remarkable. Second homes in
Reputed developers and operators have niche for second homes. rebound in domestic tourism after tapering holiday home portal data suggests that people country. As international travel norms for
offbeat locations have grown slowly but
committed to this segment of homes, of the second wave of the ongoing pandemic. are in search of an extended stay (ranging Indians are getting progressively relaxed,
Domestic air traffic witnessed a growth of 41% from a week to a month) in picturesque the surge in demand of second homes has
month on month in June 2021. The growth locations across the country 3 . Investors in extended to international hotspots as well.
increases to 51% when compared on a yearly sync with the market trends have realised
2. https://www.hindustantimes.com/india-news/domestic-air-passenger-traffic-sees-growth-in-june-amid-dipping-covid-19-cases-report-101625571649600.html
3. https://news.airbnb.com/en-in/live-anywhere-is-the-latest-trend-in-travel-reveals-airbnbs-report/
1. G
lobal Financial Crisis of 2008
savills.in 4 5
One is Not Enough: Increasing Penchant for Second Homes One is Not Enough: Increasing Penchant for Second Homes
Second Home Market:
Insights and Survey Analysis Scan to Download
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This section provides further insights on holding period, type of property, favoured designed to capture a holistic picture of the Holding Periods
second homes, in light of the prevailing market locations and purchase considerations in second homes market not only in India but Be it a primary or a second home, Across majority of the price points,
conditions which are understandably shaped the decision-making process have been select international locations as well. We have a home has a sense of emotional the preference for a holding period
by the ongoing pandemic to a large extent. scrutinised, taking aid of an extensive survey analysed and arrived at the top five inferences, attachment to buyers across age greater than 10 years is higher
Simultaneously, finer aspects of second homes carried out amongst prospective buyers in which are presented in the following sections. groups. A vast majority want to than a 5-10 year horizon. In fact,
like price buckets, investment timelines, June-July 2021. The survey was purposefully hold on to their second homes for a as the ticket size of the property
longer time horizon. The long-term increases, so does the intended
investment option does not change, investment period reflecting an
2X2 Purchasing Trend even when the end use of the intent to attain capital appreciation
The second home market in the country absorbing trend- the propensity of property is renting out. and rental return before eventual
is poised to witness high traction in potential clientele to make an exit from the cherished property.
the near term. Prospective buyers are immediate investment into second
cognizant of these unusual times and homes. 57- 70% of the respondents want
have a greater near-term visibility. Our to buy a second home within 2 years. Majority of the respondents
Intended Holding Period Across Price Buckets
survey analysis reveals that almost 70%
of respondents want to invest in a second
This short-term commitment of less
than 2 years is evident not only in the
are looking to purchase a
home priced at INR 2 cr or less. However,
the average purchase consideration for a
domestic market, but also in the preferred
offshore destinations. Interestingly, if we
home up to INR 2 cr over 57%
second home, on account of super luxury compare both international and domestic the next 2 years 50%
destination homes, moves upwards and investment destinations, maximum
stands at INR 3 cr. preference of investments is within India 46% 46%
The survey also sheds light on another
in a horizon of less than 6 months.
43% 43% 43% 43% 43%
42% 42%
36%
Survey Insights 1- 2X2 results: Ticket Sizes and Investment Period
Preferred
Preferred Second
Second Home
Home Ticket Ticket
Sizes Sizes Entry
Entry Timelines
Timelines Across
across Price Price
Buckets Buckets
2 yr or less 2 yr more
46% 34% 30% 36% 40% 37% 43%
INR 50 lakhs - 1 cr INR 1 - 2 cr INR 2 - 3 cr INR 3 - 4 cr INR 4 - 5 cr More than INR 5 cr
24% Less than 2 years 2 - 5 years 5 - 10 years More than 10 years
Source Savills India Research
14% 70%
66% 64% 60%
63% 57%
5% 5% 5%
INR 50
lakhs - 1 cr
INR 1-2
cr
INR 2-3
cr
INR 3-4
cr
INR 4-5
cr
More
than
INR 50 INR 1-2 INR 2-3 INR 3-4 INR 4-5 More An overwhelming 80% of the surveyed
lakhs - 1 cr cr cr cr cr than
INR 5 cr INR 5 cr potential second home buyers have a
Source Savills India Research long-term horizon in mind
savills.in 6 7
One is Not Enough: Increasing Penchant for Second Homes One is Not Enough: Increasing Penchant for Second Homes
Amenities Gated Communities are the Clear Winner
In order to understand the critical parameters Unsurprisingly, the most important in 60 years and above age bracket. Direct In the era of work from anywhere, having to worry about the maintenance
buyers consider while purchasing a second parameter is the desire of having a spacious connectivity from base destination, internet people tend to cherish the limited sense of such provisions on a regular basis.
home, Savills India Research analysed the and comforting second home at a holiday infrastructure and access and return on initial of community living and the same is A sense of security is an additional
responses in order of their importance while destination, which serves as an ideal place investment upon exit are other significant evident in the fact that prospective
second home buyers have a clear
and an important factor which works
in favour of gated communities. Even
Almost 60% of the respondents
selecting a particular location. Studying to relax, unwind and rejuvenate as well. parameters buyers ponder while zeroing in on
answers collectively, helped us to arrive at a While overall, spacious and larger floor size their perfect second home. affinity towards gated communities like in international locations, 61% of the in our survey, would like to
score against each parameter that drives the is the second most important factor, within apartments, condominiums, gated villas
and penthouses within a large society.
respondents prefer gated communities
as compared to standalone properties.
invest in a second home in a
selection of a particular location. Scoring has the under 30 years age group, it is the most
been devised on a scale of 1-8 and higher the important element and has a score of 6.8. Gated fraternities allow the homeowners However, preference for non-gated gated community
score, higher is the importance of the specific Similarly, health and wellness factor, with to enjoy salient facilities such as communities like independent houses,
parameter. a score of 6.1 is the most critical aspect swimming pool, gymnasium, health plots, farmhouses and bungalows
centre and state-of-the-art sporting increase moderately in the higher ticket
amenities even on a holiday, without size of more than INR 2 cr.
Factors Deciding the Investment Location
Property Type and Price Bucket Analysis
Holiday Spacious & larger
destination floor space
6.0 5.7 62%
58%
Health & Direct connectivity
52% 51%
wellness from home city
48% 49%
5.6 5.0
42%
Return on Internet infrastructure
investment & connectivity 38%
4.9 4.6
Lifestyle & Asset
affluence symbol diversification
2.7 2.6
Overall INR 2 cr or less INR 2 - 4 cr More than INR 4 cr
Gated Non Gated/Independent
Source Savills India Research Source Savills India Research
OTHER KEY FINDINGS RELATING PURCHASE DECISION
Symbol of affluence and asset Respondents in search for a second home
diversification are the least important in international locations are highly
factors across age groups, price buckets interested in getting a good return on their
and investment destinations investment (third most important factor)
savills.in 8 9
One is Not Enough: Increasing Penchant for Second Homes One is Not Enough: Increasing Penchant for Second Homes
Location Preferences
Aspiring second home buyers are more
India: Big 10 vs Other Destinations
Location Profiling
inclined towards domestic locations, Savills India Research has clustered the in the country. We have endeavored to provide costs related to buying property, stage of
be it holiday destinations or staycation domestic location preferences into specific insights on each of these clusters, elucidating second home market, type and price points
homes nestled in the mountains or regions and has depicted an incisive location various socio-economic and real estate of available units and challenges faced by
beach side locations of the country. profiling of major second home destinations aspects including active residential locations, stakeholders as well.
Approximately three-fourths of the
potential buyers would like a second Location Profiling of Domestic Investment Preferences
home in locations like Dehradun,
Nainital, Shimla, Goa, Alibaug,
Lonavala, Mahabaleshwar, Coorg,
Ooty and Wayanad. While our survey
respondents were willing to invest
in second homes across the length
and breadth of the country, starting
from Kovallam in the south to Manali
in the north and Gujarat in the west
to Meghalaya in the east, the top 10
destinations emerging from the survey
collectively have a share of 87% within
the domestic locations.
Of the one-fourth of respondents
who prefer purchasing their second
home in international locations, the
top 5 destinations- London, Dubai,
Portugal, Scotland and Canada account
for more than 75% of the share. Other
notable investment destinations are Source Savills India Research
Australia, Barcelona, Bali, Netherlands,
Switzerland, USA, Oman, Qatar and
South East Asia. Overseas Destination Preference
London Canada Australia
20% 13% 8%
Dubai Portugal Others
16% 13% 8%
Scotland Barcelona
Others includes U.S.A, Switzerland,
14% 8% Thailand, Bali, Singapore,
Amsterdam, Qatar.
Source Savills India Research Source Savills India Research
savills.in 10 11
One is Not Enough: Increasing Penchant for Second Homes
Scan to Download SURVEY INSIGHTS
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01
Location Profiling
One-fifth of the respondents are Types of Property Available
Goa
interested in buying a second home
in Goa Price Villa/
Apartment Penthouse Farmhouse Plot
(INR cr.) Bungalow
0.50-1
02
1-2
Almost 70% of demand is within
the INR Rs 2 cr price range
2-3
GDP: INR 0.815 lakh cr (2020-21)
3-4
4-5
Literacy Rate: 88.7% (2011) Active Residential >5
Locations
Source Savills India Research
North Goa
Pernem, Mapusa, Candolim, Calangute, Vagator, Anjuna,
Kadamba Plateau, Dona Paula, Siolim, Porvorim, Saligao, Select Locality Average Quoted Prices Savills Second Homes Property Cycle
Major Industries: Tourism, Assagao, Arpora as of July 2021 (INR/sq. ft.) as of August 2021
mining, fisheries, pharmaceuticals South Goa
manufacturing, real estate Vasco da Gama, Ponda, Margaon, Canacona
Locality Apartment Villa
Mapusa 4,500 - 8,900 5,400 - 14,250
Highlights
Candolim 5,500 - 12,800 9,200 - 13,000
Existing Infrastructure: International
airport at Dabolim, South Goa; Excellent road • P
ristine beaches, colonial architectural wonders and a Calangute 6,000 - 13,685 10,000 - 11,000
relaxed yet cosmopolitan local population make it a top
connectivity to neighbouring states of 10 destination for foreign tourists in India
Dabolim 6,000 - 15,370 - Stage of
Maharashtra and Karnataka Market
• Related cost of buying property:
Stamp duty Alto-Betim 5,000 - 13,500 8,000 - 9,000
< INR 50 lakhs INR 50-75 lakhs
Anjuna 6,400 - 14,000 10,000 - 17,000 LATE EARLY LATE EARLY
3.5% 4.0% UPSWING DOWNSWING DOWNSWING UPSWING
INR 75-100 lakhs > INR 100 lakhs Kadamba Plateau 4,000 - 7,000 5,500 - 11,500
Upcoming Infrastructure: International airport
at Mopa, North Goa, Patto Plaza as a business 4.5% 5.0%
hub, Atal Setu Bridge connecting multiple hubs Registration charges Dona Paula 7,000 - 14,000 9,000 -1 0,500
of Goa and proposed IT park at Chimbel < INR 75 lakhs >INR 75 lakhs Rental yields have
Siolim 4,600-8,500 9,000 - 15,000
3.0% 3.5% been in the range of
• A
ctive property management operators with a strong Porvorim 5,600 - 11,000 7,000 - 12,500 4-7% and are on an
presence of brands like OYO, Trip villas, Vista Rooms,
Amã Stays and Trails under the Taj Umbrella, Lohono
upward trend
Vasco Da Gama 4,000 - 9,000 -
Stays
Major Hospitals: Apollo Victor, Manipal
and Vrundavan Shalby Ponda 4,000 - 6,000 11,000 - 12,000
Challenges Margao 4,000 - 6,500 5,000 - 7,000 More than 20%
appreciation in land
Vagator 7,000 - 13,500
• L
egal aspects & litigation due to interspersed laws of rates as compared to
Major Educational Institutions: Goa Portuguese era and Indian laws on family ownership assets.
Source Market Sources, Property Portals 2019 pre-pandemic
Engineering College (IIT), NIT Goa, BITS • L
ocal panchayats have a significant say on approvals,
Pilani Goa Campus, Goa Institute of charges on transfer of properties and coastal zone era
regulations.
Management
13
One is Not Enough: Increasing Penchant for Second Homes
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Location Profiling
SURVEY INSIGHTS Types of Property Available
Uttarakhand 01
Leads domestic demand for second
homes in northern part of the
Price
(INR cr.)
0.50-1
Villa/
Bungalow
Apartment
Farmhouse Plot
country
1-2
2-3
GDP: INR 2.93 lakh cr (2020-21) 02 3-4
Only 3% of respondents want to 4-5
purchase plots in Uttarakhand,
reflective of the stringent local >5
Literacy Rate: 79.63%(2011) ownership laws
Source Savills India Research
Active Residential Select Locality Average Quoted Prices Savills Second Homes Property Cycle
Locations as of July 2021 (INR/sq. ft.) as of August 2021
Major Industries: Tourism, agriculture & food
processing, floriculture & horticulture Locality Apartment Villa
Garhwal Region
Dehradun, Rishikesh, Mussorie
Kumaon Region Dehradun
Nainital, Ramgarh, Ranikhet, Mukteshwar, Bhimtal
Sahastradhara Road 3,000 - 6,000 4,500 - 9,000
Existing Infrastructure: Airports at Jolly Grant Mussoorie Road 3,000 - 5,000 -
and Pantnagar; Excellent road connectivity to Highlights
Delhi NCR, Uttar Pradesh and Haryana ITBP Road 3,500 - 5,500 - Stage of
Market
Rajpur Road 4,500 - 7,500 8,000 - 11,000
• L
and values are not extremely high – ideal for
individuals looking at second homes or even a Haridwar Road 4,500 - 5,500 -
retirement home
• Related cost of buying property: Shimla Road 3,500 - 4,500 4,000 - 6,000
Upcoming Infrastructure: Rudraprayag tunnel, Stamp duty Clementown - 3,500 - 5,500
LATE EARLY LATE EARLY
new economic corridor between Delhi and Female Joint ownership Male DOWNSWING DOWNSWING UPSWING
Vasant Vihar 5,000 - 8,000 5,000 - 6,000 UPSWING
Dehradun. More than 230 kms of highway 3.75% 4.37% 5.0%
projects improving overall road connectivity in Ballupur 4,000 - 7,000 8,5000 - 9,500
the state Tehsil fees
Chakrata Road 4,500 - 8,000 -
INR 50,000 - 2,00,000 /
registration Rishikesh
Shyampur - 5,000 - 5,500
Net yields of
Major Hospitals: AIIMS Rishikesh, Max, Fortis Challenges Nirmal Bagh 4,200 - 4,800 15,000 - 17,000 Uttarakhand
Escort properties have
Mussorie been in the range
• N
on-residents cannot buy more than 250 sq. m.
of land, for bigger parcel of land (only up to 1
Mall Road 8,000 - 9,000 - of 3-6%
acre) permission needed from state
government.
Source Market Sources, Property Portals
Major Educational Institutions: IIT • Supply is fragmented.
Roorkeee, IIM Kashipur
15
One is Not Enough: Increasing Penchant for Second Homes
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Location Profiling
SURVEY INSIGHTS Types of Property Available
Himachal 01
Limited demand for second homes
Price
(INR cr.)
Villa/
Bungalow
Apartment Farmhouse Plot
Pradesh
priced at more than INR 5 cr (only 0.50-1
3% respondents are in search of
such properties) 1-2
2-3
02 3-4
Low preference for plots in the hill 4-5
GDP: INR 1.57 lakh cr (2020-21) state (less than 5%)
>5
Source Savills India Research
Literacy Rate: 82.08% (2011)
Active Residential Select Locality Average Quoted Prices Savills Second Homes Property Cycle
Locations as of July 2021 (INR/sq. ft.) as of August 2021
Shimla Division - Shimla, Solan (Kasauli) Locality Apartment
Mandi Division - Kullu, Mandi
Major Industries: : Tourism, agriculture & allied Shimla
Kangra Division - Kangra
industry, pharmaceuticals
Mall Road 6,500 - 10,500
Highlights
New Shimla 5,250 - 10,500 Stage of
Existing Infrastructure: Airports at Shimla, Kullu • R
esidential projects have proximity and better Market
& Kangra; Excellent road connectivity to Delhi connectivity to Chandigarh & NCR
NCR, Chandigarh, Punjab and Haryana • Related cost of buying property: Shimla Hill Station 5,000 - 8,000
Stamp duty
Female Joint ownership Male
Mehli 3,500 - 10,000
4.0% 5.0% 6.0%
LATE EARLY LATE EARLY
Registration charges UPSWING DOWNSWING DOWNSWING UPSWING
Upcoming Infrastructure: More than 220 kms of Female & joint Male Chakkar 4,500 - 5,000
national highways and nine road corridors; Network ownership
2% with cap of
of state-wide ropeway and cable car connectivity 2% with cap of
INR 15,000 INR 25,000 Panthaghati 5,000 - 10,000
may be explored by the state government
• A
ctive property management operators with a
strong presence of brands like Vista Rooms
and SaffronStays Annadale 5,600 - 5,800
Net yields of
Himachal Pradesh
Major Hospitals: Indira Gandhi Medical Challenges
Bharari Road 6,200 - 7,200 properties have
College & Hospital, Fortis been in the range
Source Market Sources, Property Portals of 3-6%
• I ndividuals with origin outside the state cannot
buy land without state permission
• N
on-farming communities cannot buy
Major Educational Institutions: IIT Mandi, agriculture land
IIM Sirmaur, NIT Hamirpur
17
One is Not Enough: Increasing Penchant for Second Homes
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Location Profiling
SURVEY INSIGHTS Types of Property Available
Maharashtra 01 Price Villa/
Apartment Farmhouse Plot
(INR cr.) Bungalow
29% of the survey respondents 0.50-1
would like investing in the popular
second home destinations of the
1-2
state. 2-3
3-4
GDP: INR 32.24 lakh cr (2020-21)
02 4-5
>5
Across locations in Maharashtra,
Source Savills India Research
65% of the demand is within
Literacy Rate: 82.3% (2011) INR 2 cr.
Select Locality Average Quoted Prices Savills Second Homes Property Cycle
as of July 2021 (INR/sq. ft.) as of August 2021
Active Residential Locality Apartment Villa
Major Industries: : Finance, IT/ITeS, electronics, textiles, Locations Alibaug
auto & auto components, gems & jewellery, tourism
Alibaug Beach 9,000 - 9,500 9,500 - 10,000
Alibaug, Lonavala-Khandala-Mahabaleshwar-
Panchgani, Karjat-Igatpuri Nagaon 6,000 - 6,500 7,000 - 7,500
Revdanda 5,000 - 5,500 7,000 - 7,500
Highlights Kihim 7,500 - 8,000 -
Existing Infrastructure: International airports at
Mumbai, Pune, Nagpur and Aurangabad; Excellent Chendhare 6,000 - 6,500 - Stage of
Market
road & railway connectivity to all parts of the country, Telava 6,000 - 6,500 -
• H
NIs of Mumbai & Pune prefer second homes in
water-taxi services connecting major beaches around the immediate vicinity Lonavala
Mumbai • M
ature holiday market with ample options for Lonavala Road 8,500 - 9,500 9,500 - 14,000
buying & renting properties
• P
resence of premium developers in popular Tungarli 8,000 - 9,000 9,000 - 13,500
second home destinations of the state Kamshet 7,000 - 8,000 -
• Related cost of buying property:
Kushgaon 5,000 - 6,000 5,500 - 6,000
Upcoming Infrastructure: Multimodal corridor from Stamp duty LATE EARLY LATE EARLY
Depending on metro & non-metro location Malavli - 8,000 - 9,000 UPSWING DOWNSWING DOWNSWING UPSWING
Alibaug to Virar, Delhi Mumbai industrial corridor-
includes Igatpuri- Nashik section, coastal highway 3 - 5% Nagargaon 6,000 - 7,500 7,500 - 9,500
connecting Raigad & Sindhudurg districts Registration charges Khandala
Whichever is higher Kune - 9,000 - 12,000
1% or INR 30,000/- Mahabaleshwar
• A
ctive network of property management Panchgani - 8,500 - 11,000
operators such as Airbnb, Vista Rooms and
Isprava Karjat Net yields of
Major Hospitals: Alibaug Civil Hospital, Yash Karjat Road 4,500 - 6,500 7,000 - 10,000 Maharashtra
Hospital, Sanjivani Hospital, Fortis
Shelu 3,500 - 5,500 -
properties have
Challenges
Igatpuri
been in the range
Igatpuri Railway
of 4-6%
4,000 - 7000 6,500 - 7,500
• L
ack of adequate organised supply at select Station
Major Educational Institutions: SKN Singhad price points in Alibaug.
Girnare 4,000 - 4,500 -
Institute of Technology & Science, JSM College, • H
igh premium in properties with views
Kohinoor IMI School of Hospitality Management especially in Khandala & Lonavala region. Source Market Sources, Property Portals
19One is Not Enough: Increasing Penchant for Second Homes
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Location Profiling
SURVEY INSIGHTS Types of Property Available
Tamil Nadu 01 Price Villa/
Apartment Penthouse Farmhouse Plot
(INR cr.) Bungalow
Leads domestic demand for second 0.50-1
homes in southern part of the
country 1-2
2-3
GDP: INR 21.72 lakh cr (2020-21) 02 3-4
In Chennai East Coast Road, 4-5
noteworthy (13%) demand comes from
penthouses (3-7% in other locations >5
Literacy Rate: 82.9% (2017) across the country)
Source Savills India Research
Select Locality Average Quoted Prices Savills Second Homes Property Cycle
Active Residential
Locations as of July 2021 (INR/sq. ft.) as of August 2021
Major Industries: : Agriculture & allied industries,
auto and ancillary industries, IT/ITes and tourism Locality Apartment Villa
Chennai East Coast Road, Ooty-Kodaikanal- Chennai ECR
Coonoor
Thiruvanmiyur 9,500 - 19,000 12,500 - 15,000
Palavakkam 5,700 - 11,000 6,250 - 10,000
Highlights Neelankarai 6,000 - 10,500 7,300 - 10,500
Existing Infrastructure: International airports at
Injambakkam 7,000 - 12,500 7,500 - 12,500
Chennai, Coimbatore, Trichy; Excellent road & railway
connectivity to all parts of the country • B
eautiful coastline, rich cultural heritage and Uthandi 7,000 - 8,000 5,500 - 7,000 Stage of
picture-perfect hill stations make Tamil Nadu a Market
top 3 destination for domestic as well as foreign Kanathur 6,000 - 8,100 5,250 - 8,500
tourists in India
Muttukadu - -
• A
ffordable rates and high appreciation benefits
have elevated the real estate market in the Kovalam 5,000 - 6,000 4,000 - 8,000 LATE EARLY LATE EARLY
region UPSWING DOWNSWING DOWNSWING UPSWING
Panaiyur 5,500 - 6,500 5,500 - 8,000
Upcoming Infrastructure: Upcoming Metro in • Related cost of buying property:
OMR will run parallel to ECR and improve Coonoor
Stamp duty
connectivity in the region Attadi 7,500 - 9,000 -
7%
Wellington 7,500 - 9,500 10,000 - 11,000
Registration charges
Kodaikanal Rental yields have
4%
Kodaikanal Hill Stn 6,000 - 11,250 8,000 - 10,500
been in the range of
• A
ctive network of property management
Naidupuram 6,500 - 7,000 7,000 - 10,000
3-4%
operators such as Airbnb, Vista Rooms and
Major Hospitals: Apollo Speciality Hospital, Isprava Vilpaty 5,000 - 6,000 4,500 - 5,700
Van Allen Hospital, Saint Memorial Hospital
Pallangi - 4,000 - 5,000
Ooty
Challenges Lovedale - 7,500 - 11,000 15-20% appreciation
Fern Hill 6,500 - 7,000 6,000 - 7,500 in property prices as
Major Educational Institutions: AMET compared to 2019
• F
loor space index restrictions in city centres of Kotagiri - 6,000 - 9,500
University, JSS College of Pharmacy, hilly areas in the state specially Ooty. pre-pandemic era
International School of Business & Research Source Market Sources, Property Portals
21One is Not Enough: Increasing Penchant for Second Homes
Afterword
Contrary to initial apprehensions, the Themed second homes are slowly becoming home visits and eventual online purchases are
residential housing segment in India has a noticeable trend in offbeat destinations gaining increasing acceptance. Affluent and
managed to avoid being completely derailed around the country. Developers, taking financially well-off buyers can look forward
by the ongoing pandemic. Policymakers cognizance of the rising demand, are making to investing in second homes - not only in the
have stepped in with numerous demand side conscious efforts to bridge the demand-supply country, but at select overseas destinations as
measures including reduction of registration gap and offer quality products. well.
charges and benchmark lending rates from
time to time. From a financial standpoint, while residential
property prices seem to offer minimal scope
Luxury housing segment, including the for appreciation in the current market, the
“Second Homes” market appears to be on second home market does seem to be gearing
a constant rise. Unlike earlier, when capital up for generating increasing returns. Rental
appreciation and rental incomes were the yields in popular second home destinations are
governing criteria, an additional dimension reported to be witnessing an increasing trend.
of a safe home away from pandemic hotspots Technology has also played a vital role in
appears to have become a key consideration. strengthening the investor confidence. Virtual
Major Second Home Market & Current Rental Yields
Source Savills India Research
savills.in 22 23One is Not Enough: Increasing Penchant for Second Homes
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Acronyms and References
Acronyms Research & Consulting Central Management Regional Management
ECR- East Coast Road Suryaneel Das Anurag Mathur Bhavin Thakker
Assistant General Manager Chief Executive Officer Managing Director - Mumbai
OMR- Old Mahabalipuram Road suryaneel.das@savills.in Savills India Head - Cross Border Tenant Advisory
anurag.mathur@savills.in bthakker@savills.in
Diksha Gulati
Senior Manager Kaustuv Roy Sarita Hunt
International conversions diksha.gulati@savills.in Managing Director Managing Director
Business Solutions Bengaluru
Abhinav Pal
One Crore - Ten Million (10,000,000) kaustuv.roy@savills.in sarita.hunt@savills.in
Manager
One Lakh - One Hundred Thousand (100,000) abhinav.pal@savills.in Naveen Nandwani Shweta Sawhney
Managing Director Managing Director
Megha Maan
Commercial Advisory & Transactions Delhi-NCR
Director
naveen.nandwani@savills.in shweta.sawhney@savills.in
References megha.maan@savills.in
Praveen Apte
Arvind Nandan
Ministry of Statistics and Programme Implementation Managing Director
Managing Director
Pune
Tourism.gov.in arvind.nandan@savills.in
praveen.apte@savills.in
Censusindia.gov.in Anup Vasanth
Managing Director
Chennai
Business Queries Media Queries anup.vasanth@savills.in
Shveta Jain Nitin Bahl Sesha Sai
Managing Director Director Managing Director
Residential Services Marketing, Sales and Strategy Hyderabad
shveta.jain@savills.in nitin.bahl@savills.in sesha.sai@savills.in
Gurugram Mumbai Bengaluru
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Tamil Nadu, India
savills.in 24 25savills.in ficci.com Savills, the international real estate advisor established in the UK since 1855 with a network of over 600 offices and 39,000 associates globally. This document is prepared by Savills for information only. Whilst the information shared above has been shared in good faith and with due care with an endeavour to keep the information up to date and correct, no representations or warranties are made (express or implied) as to the accuracy, completeness, suitability or otherwise of the whole or any part of the deliverables. It does not constitute any offer or part of any contract for sale. This publication may not be reproduced in any form or in any manner, in part or as a whole without written permission of the publisher, Savills. © Savills India 2021.
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