The COVID19 pandemic, the gloom around life and economy aside, has been a time when many young people realized their home-owning dreams.
By Ravindra Sudhalkar
The COVID19 pandemic, the gloom around life and economy aside, has been a time when many young people realized their home-owning dreams. The prolonged lockdowns and restrictions and resultant work-from-home reality opened floodgates of investments into property, especially in small towns.
As upward mobile individuals and families moved from states with high counts of COVID19 infections to popular holiday destinations such as Goa and Himachal Pradesh, to wait out the pandemic, these became hotbeds for property owners. Meanwhile many, whose work profile permits so, have moved to these destinations permanently. But apart from the idyllic appeal of these destinations, are these destinations really lucrative for homebuyers? Before answering that question, it needs to be described how the property market stands.
To be sure, Goa’s attractiveness as a destination for second home, or holiday home, has been on the rise for the past few years with domestic travelers thronging the coastal state. The North district particularly attracted investors from all over India, but that too is changing as the rather sleepy South slowly catches up. The state is open for people buying both land and constructed property. Land titles though can be a problem, titles in the former Portuguese colony can date back to that era. Not to mention, the several claims by family members to a single property. For buyers who do not wish to get caught in the quagmire, developed flats and villas are a good option.
While loans are also easily available for buying properties in the state, the prices of residential real estate has been largely stable in the last two decades. Besides, the development of the MOPA airport in the extreme North of the state will give a fillip to the real estate prices.
As for destinations in Himalayan states such as Himachal Pradesh and Uttarakhand, buying land can be little more complicated. While non-residents can freely buy pre-constructed property in the state, one needs special permission from the government to buy agricultural land. Even then, ownership for a pre-constructed property is limited to the property only and not to the land. In municipals areas, that is non-agricultural land, the ownership process for land is open. One can easily buy land in these areas.
Apart from resale value of these properties, whether in the hills or the beaches, rentals are a good option to explore given the tourism appeal in these states. Apart from monthly let outs, Daily rental platforms such as Airbnb and Booking.com have gained immense popularity in these destinations. The return on investment from daily rentals is very lucrative and is being increasingly explored.
However, as word of caution, hilly regions should be viewed through the prism of the environment. Being prone to natural disasters, one needs to be prepared and weigh their options well before investing there.
While as primary homes, these destinations can have their own cons, such as access to healthcare, education, etc., for investment purposes their appeal is here to stay.
(Ravindra Sudhalkar is the CEO at Reliance Home Finance. Views expressed are the author’s own.)