Dreaming of owning a second home so that you can take a break from Mumbai’s concrete jungle? Well, sit up and take note. The traditional second-home destinations around the city are losing their popularity, as upwardly mobile Mumbaikars look at options outside the state and even abroad.

High Prices Scare Away Second-Home Buyers

Popular second-home markets like Lonavala and Karjat are facing the heat. Rising prices and a lack of proper infrastructure and amenities are causing many second-home buyers to rethink decisions to invest in these regions.

“The demand has been dull for the past 2 to 3 year. The prices are not affordable and in many cases, they are as expensive as a first home in the Mumbai suburbs. Add to that the fact that these locations are cluttered and crowded and it is easy to see why people are staying away.” says Sumit Jain, national director of residential services at Colliers India.

High prices are a big barrier. Take the case of Lonavala, where a home can set you back anywhere from Rs 70 lakhs to Rs 3 crores or more depending on the kind if unit you wish to purchase. These peak prices limit the returns you can expect from your investments here. Even rental incomes are limited as a number of tier-2 developers have launched projects here, causing a glut in the market. As a result, developers are now launching projects in alternative markets that are further away from Mumbai, but still accessible with 4 to 5 hours of travel

“More developments in the second-home category are going to come about in the newer markets and not in the so-called traditional markets. There is a scarcity of land in these regions to build large developments that tick the checkboxes of what we typically believe a second home should be.” says Samujjwal Ghosh, deputy CEO – Pune & executive vice-president of marketing at the Lodha Group.

Second-Home Buyers Explore Newer Markets

Second-home buyers seem to be making a beeline towards these new markets. A trend that is evident in the case of developer Tata Housing, which has second-home projects in traditional markets like Lonavala and in newer markets like Goa and Kausali in the North. The company claims demand for its project in Lonavala has been hit, while its Goa project has seen record sales.

“The supply is high in markets like Alibaug and Lonavala among others and the market it almost saturated. That is why sales are dull. That’s also why people are moving out to locations like Goa or in the North on to the hilltops, because the pricing there still has room to appreciate.” says Rajeeb Dash, head of marketing at Tata Housing.

The price of a 1-bedroom apartment in Tata Housing’s Goa project is about Rs 32 lakhs, making it a sure bet for second-home buyers looking for affordability and all the comforts found in a prime location like Goa. It also helps that developers are rolling out new features to keep second-home buyers hooked, be it through exclusive amenities or schemes that allow them to maximize their returns.

“We have come out with a dual key concept where apartments are designed in such a way that a 3-bedroom apartment can be split into a 1 or 2-bedroom apartment. This offers buyers the freedom to rent these units out when they are not staying there. That’s a big hit with the second-home crowd and we are seeing a lot of demand for these.” says Rajeeb.

That’s not all. Upwardly mobile second-home buyers are also looking at options abroad, in Dubai and Bangkok in South-East Asia. These are markets which allow foreign ownership of property, but at much cheaper rates and with tax benefits. With the government relaxing limits on how much Indians can invest abroad, real-estate consultants are reporting increased enquiries for second-homes in these areas and are expecting this trend to grow in strength.

Nikhil Narayan Sivadas, Assistant Editor, NDTV