The demand for luxury holiday homes in India is on the rise, thanks to the country’s rapid economic growth and increasing disposable income. It’s not just the high net-worth individuals (HNIs) who are buying luxury villas in tourist destinations for self-use and investment purposes, but also the aspirational class who are keen on investing in properties in holiday destinations. This trend is reflected in the growing market size of holiday homes.
As per an industry report, the holiday home market in India was worth USD 1.4 billion in 2021. It is expected to grow at a compound annual growth rate (CAGR) of 23.63% and is likely to reach USD 4.021 billion by 2026. The demand for holiday homes has been increasing at an unprecedented rate. Owning a holiday home is no longer just a luxury, but also a strategic move that offers both a better lifestyle and potential financial gains.
The trend has been further accelerated by pandemic-induced changes in lifestyle and flexible work. Also, with increased pollution in Delhi and Mumbai, especially during winters severely impacting health, people prefer to move away from bustling cities and be close to nature amidst open and fresh air for a better life. These two factors have made people realize the importance of work-life balance and the need for a place to escape the hustle and bustle of city life.
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According to industry reports and statistics, the second home market has undergone significant changes in recent years. Since the pandemic, there has been a considerable increase in demand for farmhouses, and luxury villas by the seaside and hill stations, and the second home rental market has also witnessed substantial growth. Buyers looking to purchase holiday homes prefer easily accessible locations, as shorter travel times enable them to use the property frequently. The demand is trending upwards across the country, particularly in resort areas near metro cities.
Popular options have emerged in places like Himachal Pradesh, Uttarakhand, Nilgiris, and many city suburbs. Kasauli and Rishikesh, among other popular tourist destinations in the North, are experiencing healthy demand for big and spacious homes. Luxury villas are also catching the interest of NRIs looking for luxurious holiday homes in the hills. While some intend to buy a second home to diversify their assets, others choose to do so because they consider it an attractive investment option for higher capital appreciation. Besides, since holiday homes are typically used for short spurts of time, owners can rent them out to homestays and tourism businesses when not in use.
The resurgence in demand for holiday homes has caught the attention of developers who have the expertise to develop luxury weekend getaway properties. As a result, branded developers are launching properties in such locations. With the evolving scenario, holiday homes are becoming more appealing than hotels or resorts due to the benefits offered by their surroundings.
(By Amar Kapoor, CEO, Terra Grande by Eldeco Group. Views are personal)