A NEW NICHE PROPOSITION
by Cushman & Wakefield Research

Holiday homes, vacation homes, second homes – call them what you will – are fast catching up as a niche housing segment in India. What differentiates this new age avatar from its older, more traditional cousin, is the fact that whereas aristocratic and well-to-do families bought their own land or residential property at vacation or pilgrimage destinations, holiday homes today are being offered and aggressively marketed by real estate developers at holiday spots and city outskirts. Many such projects even come attached with outdoor or sporting activities, such as golfing, water sports and community farming. Since such properties lie vacant for the most part of the year, developers often propose to turn them into income opportunities for owners through rental or timeshare schemes as well.

“Recently, we have been working on several villa developments and vacation homes at the upper segment of the holiday market. An interesting trend we have noticed is the new importance placed on common amenities and maintenance by clients. As a result we find ourselves designing with more than just the individual home in mind.”

--Ashwin Alva
Architect, Alva Associates

VACATION DESTINATIONS
Hill stations, riversides, beaches and eco-friendly rural locations are some of the more popular destinations for the new crop of holiday homes that are being developed in the country. The Wayanad region of North Kerala, Goa, Lonavala, Shantiniketan near Kolkata, Shimla and Rishikesh are just a few such locations where national as well as local developers are offering vacation or second homes. Down South, for instance, holiday home destinations include hill stations like Kodaikanal, Ooty, Yelagiri and Yercaud. The East Coast Road stretch from Mahabalipuram to Pondicherry is also becoming a popular destination for such projects, and upcoming beach houses seem to be the latest trend. Up North too, hill stations like Shimla, Manali and Rishikesh have been attracting national as well as local developers for building gated residential projects that are specifically marketed as second homes or holiday homes, and come with fully-furnished options, along with various entertainment and well-being facilities (such as club houses, swimming pools, spas and yoga centres, landscaped areas, etc).

Holiday homes have witnessed steady demand over the last few years in Western India. With improving standards of living and growing urbanization, holiday homes in the region have been offering recreational and leisure opportunities for city-weary home buyers. Additionally, an emerging trend is the increasing demand for small gated townships with full utility and maintenance services. Lonavala, Shahpur, Alibaug, Kasara, Igatpuri, Talegaon and Karjat are some of the more significant holiday home destinations from the region, along with Anjuna, Dona Paula and Mapusa in Goa.

Weekend Getaways beyond city Limits
Holiday homes have also been offering end-users, looking for short breaks from city life, recreational and leisure opportunities for quick weekend getaways. To tap this growing opportunity, the country’s top builders have been entering into new land deals on the outskirts of metropolises like Mumbai, Bangalore and Kolkata. These projects offer ample scope for recreational or sporting activities like golf, water sports, trekking, hiking and community farming.

Developers today are increasingly considering Mumbai’s outskirts like Talegaon, Alibaug and Lonavala, apart from Pune, to launch such second home projects. Many developers have already come out with second home concepts in the outskirts of some of the major cities. Besides offering a fixed annual rental income, housekeeping and maintenance come as part of their basic services here; and these second homes also come with fully-furnished options.

RECREATION OR INVESTMENT?
In addition to being a holiday retreat, holiday homes can also make an interesting investment opportunity providing capital gains and rental income. Additionally, the demand for vacation homes these days has been further stimulated with several banks and financial institutions providing loans for such projects. However, it is important to note that pricing is very specific to the holiday home location, and it is difficult to generalize on price ranges.

The area of an average holiday villa or row house ranges between 1,500 and 2,500 square feet, while studio apartments range from 500 to 1,100 square feet. At present, the potential target customers for holiday homes in India include businessmen, professionals, CEOs, corporate executives, NRIs and HNIs. Additionally, many developers are also targeting a segment of buyers who already have a city home, and would like to invest in an additional residence, but are constrained by the high prices in cities like Mumbai, Delhi and Pune.

Currently end-users are investing in such second residential properties with a desire for either a holiday destination or capital gains/rental income. Further categories in this segment of retirement homes and pilgrimage homes are also being created. But notwithstanding the secondary motives behind such a purchase, the primary usage is almost always for recreational purposes. Till the time the segment comes into its own in India, it will understandably experiment with multiple formats before creating its own unique identity.