While first-home buyers are postponing their decisions many homeowners are going in for their second homes in India. The phenomenon is providing some succour to the realty market.
Moneyed individuals are continuing to invest in second homes when affordable housing remains a distant dream due to high realty prices. The second home buyers whose individual or family income is more than Rs 20 lakh a year are not too price sensitive to defer purchase decisions when analysts predict a fall in realty prices.
“There has been a 20-25 per cent increase in second-home purchases over the last four years. Second homes have emerged as an acceptable investment route and owning a farmhouse, home in the hills or a beach cottage is certainly a matter of personal pride and prestige,” said Pankaj Renjhen, MD (Mumbai) Jones Lang Lasalle Meghraj.
People like Andheri resident Sunil Shah (50) who stays in his own house and gets rental income from another house is actually going for another property. Borivli resident PP Sharma (39) who stays in a one bedroom-flat has also booked a second flat that would cost him Rs 80 lakh in Andheri.
According to experts the second home segment contributes to 30 per cent of the total residential realty market and is in fact providing a breather to developers who are bogged by the ongoing slump. The monssons, however, are normally a lean-season for both buyers and sellers and activity normally peaks around Diwali.
Renjhen said that the second-home buyer segment is the middle-to-top management executives and entrepreneurial class, usually in the age bracket of 35-45. With rising home loan interest, inflation and property rates, second homes are not an option for everyone.
In the case of Mumbai and Pune, the locations of choice for second homes are Lonavala, Khandala, Baneshwar and Alibaug. Lavasa Corporation near Pune being developed by Ajit Gulabchand-controlled Hindustan Construction Company is also getting buyers attention.
Rajgopal Nogja, COO, Lavasa Corporation said, “This new town planned on principles of new urbanism is targeted at permanent residents and for people investing in second homes. The response to our bookings has been phenomenal and till date almost 600 apartments and villas have been booked.”
Nogja said Lavasa’s offerings are from Rs. 15 lakh to a crore there are products at every 10-15 lakh price point. The price range for homes in hill stations can be anything from Rs 25 lakhs to Rs 2 crore. According to Abhilash Lal, Director Consulting & Research DTZ, a global real estate consultancy, professionals who earn more than Rs 25 lakh per annum can invest in a property costing Rs 1 crore onwards. In the National Capital Region finest apartments and condominiums are located in Gurgaon and Noida along with the the plotted developments in the posh localities in South Delhi.
In fact, there are limitless options for buyers of every level of spending power.
Inside Mumbai, Goregaon’s Royal Palms Estate is a weekend gateway with many individuals having invested in second homes.