There has been a spike in demand for farmhouses, luxury villas and themed home, thanks to rise in tourism activities post-pandemic. The growing interest in farmhouses and the like products are now seen as a safe bet for a passive monthly income and even plan retirement as well. 

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Farmhouses, villas, themed homes and related products are poised for robust growth based on positive sentiment drivers. Given the favourable economic conditions and market sentiments, the demand will only continue to boom in the coming years. Modern-day expectations of environmental compatibility, durability and the use of resources make them unique and offer leverage to the USP. People easily reconnect with nature in complete luxury. 

Ankit Kansal, Founder and Director- 360 Realtors said, "Farmhouses, villas, and second homes are no more just popular amongst the Indian super-rich, NRIs, and HNIs but are also becoming a sought-after investment amongst the new class of retirees such as semi-retired businessmen, Retd. Govt officers and defense professionals, doctors, lawyers, etc., and corporates. Presently the size of the second home market is USD 1.394 billion and is set to cross USD 4 billion by 2026, growing at a CAGR of 23.6%, as per research by 360 Realtors." 

"Second homes and farmhouses do not just offer a great avenue to spend time amidst nature and recharge your mind & body but can also make attractive income streams. The capital appreciation in traditional second-home markets is around 5-12% annually. In upcoming locations such as MOPA region, Sindhudurg, Konkan belt it is up to ~ 25% yearly," he added.  

Going by the data, the recent rate hikes by the Reserve Bank of India (RBI) do not seem to have a material bearing on people who buy their dream residential properties on borrowed funds. People are becoming increasingly aware that rates would move up and down and that their decision is based on current income and future prospects. The RBI data revealed that housing loan outstanding increased in the range of 13.7 to 16.4 per cent YoY in each of the first five month of the current financial year.

He further noted, "Besides, one can make constant income through rental yields. A well-made second home property in a popular tourist destination such as Goa, Lonavla, Karjat, Shimla, Chail, Dehradun, Nainital, Mussorie can enjoy 100% occupancy during the weekend and extended weekend season. Likewise, due to the growing popularity of workation, WFH, flexible working etc, long leases are also picking up fast."

Anuj Puri, chairman, ANAROCK Group, said that luxury properties priced Rs 1.5 crore crore gaining traction with 4 per cent rise in vote share - from 6 per cent in pre-COVID  to 10 per cent in H1 2022.

"Buoyed by the increasing demand for luxury segment, developers have also significantly increased the new supply in this category in H1 2022," he said. "The pandemic effect on home sizes continues - larger spaces in non-core urban areas remain in higher demand across the top cities. The reopening of offices and schools has changed little about this trend as the increasing demand vouchsafes."

On the impact of housing sales in the backdrop of the continuous rise in interest rate, he said that if interest rates breach the 9.5 per cent mark then it could dampen the spirit of buyers.

From investment view, according to Vijay, people are investing in a farmhouse, villas and luxury properties. Interestingly, young professionals and women too have shown enthusiasm to invest in such avenues. 

Kansal added, "Popular destinations such as Lonavla and Lavasa can make rental yield up to 6% annually. Rental yields in traditional coastal regions in Goa are 4.5-5% (Panjim, Calangute, etc). In the interiors in North Goa and the nearby Sindhudurg region, the yields can go up to ~ 7.2%, as the upcoming MOPA airport is driving demand.  Shimla and Chail’s rental yield is close to ~ 4%." "Increasingly second-home market in India can also be repackaged as alternative tourism properties such as eco-resorts, wellness centers, forest lodges, spa & holistic health hotels, etc. Already the trend is visible across the Sahyadri ranges, Konkan belt, thick eco-reserves in Maharashtra, etc. In the coming time we will see a growing confluence between 2nd home properties and hospitality sector, thereby further drawing investor interest," he said. 

 

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