India’s Retirement Second Home Market Size Expected to Reach $4 Billion by 2026
"Second homes have been part of an aspirational lifestyle for a long-time, and with the pandemic changing the real estate market in various ways, the second home industry has come into the spotlight," said Aditya Kushwaha, CEO and Director, Axis Ecorp.
India’s retirement and second home market segment is expected to grow annually by 23.63 per cent in the next 5 years taking the size of the market to USD 4.021 billion by 2026 from the current size of around USD 1.4 billion, an industry report showed.
According to 360 Realtors’ latest research report, sales for vacation homes have sky-rocketed in the last couple of years. The COVID-19 pandemic has acted as a catalyst and pushed the demand for second homes and retirement houses in India.
The concept of retirement and second home (RSH) started to gain traction in the previous decade. With the lockdowns and travel restrictions, more people have warmed up to this idea.
“Second homes have been part of an aspirational lifestyle for a long-time, and with the pandemic changing the real estate market in various ways, the second home industry has come into the spotlight,” said Aditya Kushwaha, CEO and Director, Axis Ecorp.
Kushwaha said purchasing a second home is often not just about investment, but also about a lifestyle choice, an alternate residence, a future residence, or simply diversifying assets.
“Today, most corporate professionals are working from home, so geography is less of a constraint and that has further fuelled the demand for a getaway home that is away from the hustle-bustle of the city,” Kushwaha said.
“In the last couple of years, we have launched several big-ticket projects on the holiday home concept in North of Goa. These projects include Axis Blues, Axis Yog Villas and Axis Blues and they have all been accepted well by the consumers,” he added.
There is also a surge of people looking to escape from the city and are looking to settle in quainter places. Goa has emerged as the top choice for people looking for a holiday home. With sun, beaches, and a beautiful landscape, Goa has emerged as an appealing destination for buyers. In addition to Indian buyers, NRIs also invest heavily in the coastal state. Rowhouses, gated communities, and villas are some of the numerous options for buyers.
While Goa continues to draw a lot of attention, Ooty is emerging as another popular option. The areas around Ooty offer a range of fun and entertainment options as well as easy access to cities such as Bangalore, Chennai, and Mysore. All this has made Ooty a popular choice for people looking for a second home.
In the North, hill stations such as Shimla, Solan, Dehradun, Nainital and Mussoorie are gaining acceptance.
Not just holiday home, the retirement home segment too has picked up in the country.
Commenting on this trend, Vinit Dungarwal, Director at AMs Project Consultants Pvt Ltd said, “In this post-pandemic phase, the demand for a retirement home has increased many folds. During the pandemic, the majority of the elderly population, despite their financial resources, had been left to manage on their own.”
“From the regular grocery runs to dealing with medical emergencies, they were forced to do everything on their own. This phase has pushed many in this age bracket to seek a house in a senior living facility. These facilities are designed keeping their needs in mind and enable them to live their lives peacefully and independently,” Dungarwal said.
With all these factors coming into play, the RSH segment in India is expected to keep growing. The rise of the WFH culture, a shift away from city living, and the viability of second homes as an effective investment and low rate of interest are other factors that are acting as enablers to this trend.
In the coming years, Himachal Pradesh, Uttarakhand, and Nilgiris in Tamil Nadu are also expected to emerge as viable RSH destinations. Apart from row houses and villas, farmhouse-style living is also gaining popularity. This has further enabled people to bond with nature, providing a holistic way of living.
“The pandemic has further given a huge thrust to the RSH market in India. While growth in many traditional asset classes such as residential, office assets, and retail units took a beating, demand for second homes increased significantly,” said Ankit Kansal, Founder and MD, 360 Realtors.
“In the face of the menace caused by the virus, many buyers started looking for holiday home properties to escape the congested, spurred and hectic city life. A growing thrust on Work from Home culture or rather Work from Anywhere lifestyle has further propelled the uptrend,” he said.