While the overall real estate sector has been witnessing sluggish behavior, the second homes segment has been going strong. We look at the factors driving its growth
While exotic foreign destinations are a choice for some, when it comes to getaways for spending quality time with their families, there are many others who prefer nearby places where one can spend more time. This is where second homes are a huge success, as it serves the dual purpose of a holiday getaway, while staying at home.
Developments that are likely to boost the second homes market
Second homes are often in destinations that are considered apt for leisure, where people want to escape from the city life during long weekends or short trips, points out Aditya Kedia, managing director of Transcon Developers. “The second homes market has always been doing well and in some places, it has also commanded a premium, even in stable times,” says Kedia.
The interim budget of 2019, has also proposed to exempt the levy of income tax on notional rent, on a second self-occupied house. “This will provide added savings in the hands of second home buyers, further driving investor activity in the real estate sector. Also, with more transparency and market consolidation over the last one year, we can expect a boost in the second homes market,” says Madhusudhan G, chairman and MD, Sumadhura Group.
Infrastructure also plays a big role in the success of second homes. As second home projects are mostly prevalent along the outskirts of cities, connectivity to these locations is a major factor determining their success. Earlier, such connectivity was sorely missing and the unavailability of basic facilities only compounded the problem. However, with the increase in infrastructure projects across different parts of the country, these areas, where second homes are prevalent, have become easily accessible, thereby, attracting investors. “Second home projects offer large spaces in the lap of nature. This, of course, comes at a cost, which buyers are willing to pay as they know that there is always something more that they are getting in return,” says Kedia.
Advantages of second homes, versus other holiday getaways
Although there are options like hotels, lodges and other properties available for a vacation, second homes are still preferred, because the person can not only spend leisure time to explore his hobbies, but also gets a tangible investment in real estate.
For some, owning a second home is also a status symbol. Investing in second homes, makes sense for people who frequent the same location. “This investment will grow and earn income for you, by appreciating over a period of time and giving good returns. Rental is also an option, when the second home is not put to personal use,” points out Dinesh Doshi, MD of Tulsi Realty.
- With more transparency and market consolidation over the last one year, we can expect a boost in the second homes market.
- Investment in a second home, will appreciate over the long-term period. Rental income is also an option, when the second home is not put to personal use.