By Avnish Yadav
Weekend homes or vacation homes have traditionally been preferred by the uber-rich Indians as a status symbol. The concept of owning a second home is to avoid the hustle and bustle of city life and spend quality time with family. The second home market has evolved more than just a holiday getaway wherein buyers are also looking to earn decent returns from the property. Majority of these buyers are NRIs or elite class having higher disposable income and interested in buying a second home. Post demonetisation, the demand for such homes has reduced as only buyers having legal source of income and embracing legal channels are interested in buying a second home. Besides this, the Budget 2017 has also dampened the sentiments with government capping the tax benefits on the purchase of such homes.
Buying a second home has always been a lifestyle choice, but many buyers are now realising the investment potential of such homes. In the recent years, this segment has registered an ongoing interest from the people belonging to the age bracket of 35-50 years who prefer to buy such homes within the travelling distance of 100-200 kms from their primary home. The property prices of such homes are higher as compared to city-specific homes as it depends upon the location and luxury amenities offered by the developer.
On the other hand, the developer also markets such properties as a leisure destination and investment opportunity for the end-user. While this segment has been immune towards the affluent class, it has also generated huge interest from the middle class as well. Apart from the luxury factors, these properties often serve as extended homes post retirement for weekend getaways. Therefore, one should choose such homes keeping in mind the factors such as weather, infrastructure, and rental income. Though these properties do not offer best capital growth or appreciation but they can certainly offer sheer luxury for holidaying. However, one can expect growth in rental value, if the destination witnesses round-the-year tourist footfalls and is considered as an attractive location for corporate events such conferences, events and spiritual workshops.
The road ahead
Even though the market is still low-spirited, the demand for such homes is still in the evaluation stage owing to demonetisation and provisions made in the Budget 2017. However, the sales and enquiries are still prevalent in the market for those looking the perfect time but their second home. In addition to this, buyers are looking to buy second home as an income-generating asset in today’s market. The market is still favorable in terms of pricing advantage and will improve further in future. Apart from the location and connectivity, the buyer should conduct research diligently such as credentials of the developer, clear land title, amenities, etc. before zeroing in on the property. Additionally, the buyer should keep in mind his financial goals and calibrate their budget accordingly and look forward to purchase a second home from a long-term perspective.
(The author is Deputy General Manager, Residential Services, Colliers International India)