MUMBAI: Driving out of the city on a weekend to the beautiful landscape in the western ghats within a 200-kms distance from Mumbai is now seen more than a weekend getaway. Given the plethora of options in housing available in the scenic spots nestled in the hills, people increasingly prefer the option of driving to their second homes and relaxing over the weekend. With the Konkan coastline with its verdant landscape and lush greenery on one side and the Arabian Sea on the other, a second home in such areas may appeal to many.
“Over the past decade, India has witnessed rapid economic growth. According to recent statistics, the disposable income in India has doubled in the past 5 years and has been growing at 15 per cent CAGR. The consumer spending has increased by 35 per cent during the same period. Second homes have therefore, gained importance in recent times as they provide people an real estate investment opportunity, either for capital appreciation or for regular rental income. People also invest in second homes to make it their post-retirement home or simply to make a lifestyle statement,” explains Aniruddh Wahal, managing director-occupier services, transactions, DTZ India.
The vertical growth of the financial capital of India has resulted in its residents feeling the need for more open spaces. The city has been a pioneer for the beginning of an apartment culture that soon spread to many cities and towns across the country. Though this vertical growth has seen a demand for realty development, it has also left many citizens feeling deprived of the open spaces that were available before such growth; for instance, their own garden, more floor area and open skies. This dissatisfaction and need for open spaces has gradually led to a trend that is seeing many from the city opt for an investment in a second home, at locations away from the bustling metropolis.
According to Ganesh Vasudevan, CEO, IndiaProperty.com, good climate, connectivity, along with the advantage of being just a few hours’ drive from Mumbai’s chaotic life make these destinations hotspots for investment. “The property prices have seen constant appreciation at these locations. One of the major reasons for the increased popularity is the celebrity quotient, and thereby more and more people want to own a property in such areas. Prices have skyrocketed and increased by 10-15 times in past 4-5 years,” explains Vasudevan.
The factors that have led to such price appreciation and development of realty pockets in far off areas include good connectivity, need for ambient climatic conditions and a desire to unwind in the lap of nature. Popular second home destinations include Mulshi, Alibaugh, Lonavala, Tamhini Ghat, Matheran, Talegaon, Karjat and locations near Sinhgadh Fort such as Khanapur, etc. Alternatively, investors who do not prefer ready homes but want a personalised touch can also opt for plots to build a second home in their own style. Some prospective second homebuyers who have a higher budget also look for ready-to-occupy premium villas. “Whether the development is a gated community, theme development or a branded home offering bungalows, row-houses, doublement or villaments, the buyer would want to invest in a different type of property than an apartment, which he already possesses in the city,” explains Shrinivas Rao, CEO-Asia Pacific, Vestian.
With most of leading realty developers now offering properties in these offbeat locations, prospective second homebuyers are considering the amenities and splendid views offered as incentives and displaying a keen interest in them. According to Vestian’s industry estimate, Mumbai records the highest number of high net worth individuals (HNIs) in India, followed closely by Delhi and Bangalore. Primarily, it is this segment of individuals that contemplate investing in luxury properties as a second home, whether it is from a usage perspective or from an investment one.
“Compared to the concrete jungle that Mumbai has become now, open spaces, fresh air and proximity to nature are the qualities in such locations, which make them more attractive for home buyers in Mumbai. With the easy accessibility to commute between Mumbai and such locations, people started investing in second homes such as Lonavala, Alibaugh, etc., a few years ago. The concept of gated communities took shape gradually and big players getting in the second home market made investors feel more secure and confident about their investment,” says Vivek Talwar, MD, NITCO Ltd.
Connectivity augmenting the trend
Connectivity is a major factor that has made investments in second homes a possibility. A property situated in close proximity to an ambitious infrastructure project like the expressway helps in the appreciation of property rates. It also reduces the travel time from the city, giving the home owner easy access to his second home without feeling the need to be bogged down by irritants such as distance, bad roads and traffic congestion.
“With development in infrastructure such as the Mumbai-Pune expressway, connectivity with locations such as Lonavala, Khandala, etc., has improved significantly. With increased connectivity and ease of commute, more people are willing to invest in second homes.
Destinations such as Karjat, Lonavala, Kamshet, Talegaon, Alibaugh, etc., have witnessed a rise in the number of second home projects. This has also increased the property prices significantly. A villa in Lonavala in 2006 would have cost Rs 20-30 lakhs. A similar villa now costs about Rs 1.5 crores. Prices of premium villas are as high as Rs 10 crores. The expressway and highways have further reduced travel time to destinations within 200-300-kms radius and hence, destinations in the Konkan belt such as Kashid, Alibaugh, Murud, etc., have become popular destinations for secondhomes,” adds Wahal.
“There are several high end projects in Tungarli and Waksai villages located around Lonavala – however due to high demand, the property prices have significantly increased. Several projects are offering villas in the range of Rs 1.5-5 crores. Other upcoming locations for second homes include Tamhini Ghat, Lavasa, Mulshi, Kolad, Malshej, Matheran, Kashid and Karjat. Second homes in these locations start from around Rs 25 lakhs onwards,” he says.
Returns from a second home
Investing in a second home suits different requirements for home buyers. For some, it might be a retirement option, while for others it may be a luxury pad to unwind. “Basic aspects that a buyer looks for while buying such properties are climate, view, pricing, accessibility, etc. In metros, about 20-25 per cent of people opt for second homes either as an investment or a weekend home. Today, a large percentage of first home buyers are also opting for such destinations as they cannot afford a property in metros,” adds Vasudevan.
Second home options between the cities of Pune and Mumbai are ideally located. This makes the investment convenient, lucrative and intelligent. Form any young couples as well as senior citizens, the need to escape from the confines of the city is paramount to lead a healthy lifestyle. For them, instead of splurging on hotels and resorts, this option works out quite well. The rising realty rates and increasing project launches in these areas are proof of the trend.
“Clients investing in a second home would first calculate the potential returns as well as the brand. Amenities also play a vital role in a second home project. Access to hospitals, stores, etc., becomes an advantage for a developer to promote the project, while clarity on the project status is equally important. Nowadays, rent back schemes are also attracting more investors in the second home sector,” informs Talwar. According to him, Khandala, Lonavala, Alibaugh, Karjat, Pali, Murbad, Malshej Ghat, Wada, Shahapur, etc., are some of the upcoming destinations for investors looking at owning a second home.
“Buying or investing in a second home is a great way to expand your real estate portfolio. However, the quality and exclusivity of the project, along with the location and access to good infrastructure will determine the investment value. The returns from this investment may be short to medium term,” concludes Rao.