India’s holiday home craze is spiking property rates. And no, it isn’t Goa alone

Something’s coming over India’s real estate market. Especially in the high-end segment, change is in the offing, after nearly a decade of slow or stagnant growth.

Among others, one of the most interesting trends to have popped up and is going strong is the demand for holiday homes.

“Today, there are not enough (holiday) homes to sell, compared to the demand for them,” said Amit Goyal, managing director of India Sotheby’s International Realty (India SIR), the local real estate wing of the famed auction house.

Sotheby’s should know, considering how the company has made hay while the sun shone on Goa, and its plethora of high-end holiday homes, over the past post-Covid years. As well-heeled Indians cooled their heels inside their city homes during lockdown and international flights got suspended, one of the first reactions was an instant uptick in the demand for holiday homes, especially in Goa.

“Large business families, CXOs, professionals and start-up founders looking for a bespoke lifestyle make up the customer profile for luxury homes,” said Goyal.

The intense craze for prime holiday home properties in the sunny state contributed to a neat 10 per cent of India SIR’s transaction values in the financial year 2023—about Rs 3,600 crore. This included a big ticket sale of a villa in Goa listed at Rs 42 crore. “Goa’s on fire,” quipped another senior Sotheby’s official.

The spike in demand for high-end properties after Covid has seen the company’s revenues from about Rs 2,500 crore last year to Rs 3,600 crore this time. Buoyed by the robust demand, the firm is now aiming for a sales transaction turnover of one billion dollar by 2024, when it completes a decade of operations in India.

While Goa is second in transaction value to Delhi NCR and Mumbai, interestingly realty professionals indicate that a good chunk of high-value properties in India’s top tourist destination is snapped up by residents of the national capital. A close second and a recent trend? Residents of landlocked Punjab scouring for properties by the beach.

With international travel opening up in recent months and the swish set now training their holiday glares westward, the intense craze for a second home/holiday home in Goa may subside, but it is nowhere close to cooling off, if market trends are to be believed. The opening of a second airport in Goa, towards the north of the state in Mopa, has increased accessibility as well as the catchment area where people would want to acquire space. With dollar appreciating, non-resident Indians also form a prime clientele.

Sensing the opportunity, many leading realty players, including DLF and Puravanakara have already set their sights on Goa.

And by no means is Goa the only holiday destination where property buyers are making a beeline for their second homes. If Sotheby’s own sales records are any indication, demand outstripped supply in spots like Rishikesh and Mashobra, both not-so-long drives from the national capital region (or Punjab and Chandigarh, in the case of the latter), as well as Alibaug, a beach suburb that is a quick boat ride away from the metropolis of Mumbai.