Tag Archives: Affordable homes

Can affordablity drive luxury of weekend home?

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Bottom Line: Whether a weekend home should be luxury or affordable is an old debate. Ravi Sinha evaluates the two sides of the argument. 

Second homes, Holiday homes, Weekend homes, Investment homes, Leisure homes, Investment for weekend, India real estate news, Indian realty news, Real estate news India, Indian property market, Track2Media Research, Track2Realty

Weekend Home

Rakesh Gupta, a property agent operating out of Goa was surprised when Nikita Chaudhary, an NRI from Britain, told him that she is looking for a weekend home near the mountains. And her final choice would be subject to the price point as she is looking for an affordable option.

The broker who deals with high-end luxury properties of Goa & Mmbai-Pune region was asked to scout for property in places like Shimla, Manali, Kullu and Haridwar. He was nevertheles not sure what this NRI lady meant by affordable. He rather wondered about the seriousness of the deal.

“Isn’t a second home meant to be luxury property? Why would one go for an affordable option as a weekend home? Can an affordable budget buyer spend for a holiday home.” These were some of the questions that came to the thought of this property agent.

Gupta is not alone to have this dilemma when it comes to look for a second home with affordable options. As a matter of fact, the debate of whether a holiday home is necessarily a luxury property or affordable homes can also make their way to this elite league is quite old.

The proponents of weekend home as affordable peoperty believe it is the location that is a demand driver of holiday home and not the price point. This school of thought believes that a second home can also be bought with future appreciation in mind. Many of such weekend homes become the first home destination within a few years when the infrastructure is upgraded.   

Others believe it is the buyers’ profile that idetermines whether a second home would be affordable property or the luxury property. Of course, the rich and affluent buyers go for a weekend home for sheer luxury & pleasure of holidaying. The demand in this segment of buyers is more about the luxury amenities than pricing.

The mid segment of buyers, on the other hand, have budget in mind but are not ecessarily looking for low-cost houses. They want to enjoy the house as a weekend home and also look for the appreciation potential in future. So, it is investment as well as luxury with their given budget and tourist locations serves the dual purpose.

There is also a third set of buyers who buy properties in the second home locations as their first home. They are the buyers who look for locations that would be first home location in the next few years. Of course, the budget constraints force them to look for low-cost housing. Analysts believe this third set of buyers can not be classified as the second home buyers.

Luxury or affordable dilemma?

Equally lucrative market for high end and mid segment buyers

Amenities & luxury more important for high end buyers

Affordability a key concern for mid segment buyers

Location equally critical for all second home buyers

Over and above these three set of buyers, the developers believe it is the location that also determines what are the aspirations vis-Ă -vis the holiday homes. Nikhil Hawelia, Managing Director of Hawelia Group says it is all about the geographical presence of the buyers. For example, a location where one can buy his first home as a decent property within a budget of Rs. 1 crore will never go for a second home above Rs. 50 lakhs. But in places where a decent first home attracts a price of Rs. 3 crore the buyer will look for a second home around one to two crore rupees.

“This probably is the reason why there is so much of debate over the luxury and affordable options in the weekend homes. Of course, one living in Mumbai and going for a second home in Goa has a different outlook of property and pricing. Such buyer can not be compared with those who are living in Noida and going for a weekend home in Manali where the price point at both these locations are on the lower side,” says Hawelia. 

Santosh Naik, CEO & Managing Director of Disha Direct maintains that the options are individual-specific but every Indian now desires second home close to nature, from hills to the coast to get a refreshing break from the hectic lifestyle and spend quality time with their family. Being a real estate asset, second home is becoming a good investment option for savvy buyers.

“Looking at this opportunity many developers are coming up with new projects at various destinations. It is not surprising that second home sector is emerging as one of the fastest growing sector, growing at 70 per cent year on year for last few years,” says Naik.

In a nutshell, the second home is at a nascent stage in the Indian property market. It is hence debatable as to who are the major demand drivers – whether luxury buyers or the cost conscious & aspirational upward middle class. But what can be vouchsafed is the fact that the second home has demand drivers across the financial standings and one size fits all answer is not there for the developers also. They need to evaluate the location and the buyer profile to offer the right kind of second homes in the given market.

Symbiotic relation of holiday home & affordable home?

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Track2Realty Exclusive

Bottom Line: First home for staying in and second home for holidaying in goes the conventional wisdom of the property market. And hence, second home (or popularly known as holiday home) is seen as a property investment by those who have enough to splurge without giving any serious thought to affordability.

Holiday Home, Second Home, Luxury Home, Investment Home, Homes for holidays, Holiday Homes, India real estate news, Real estate news India, Indian Realty News , Indian Property Market, Investment for weekend, Weekend Homes, Track2Realty, Track2Media ResearchWait! Before you think that second home is all about living life king size with all the luxury quotient attached, the market realities get you exposed to another rider. Is there any symbiotic relation between second home and affordable home.

There is a growing debate within the realm of second home market as to what is the psychograph of the buyer. Whether they actually go for affordability or location or amenities, or all these factors collectively drive the second home buyers. These are the emerging market realities and till recently the property investment pattern across the country in general and Mumbai in particular suggested that there existed a symbiotic relation between the second home and an affordable home.

Of course, the attraction that lies with the second home and what differentiates it from the first home is still the oft-repeated and clichĂ©d parameter called ‘location, location & location’. Having said this, it is also the price point that differentiates the second home from the first home as people invest less in second homes compared to first home.

Analysts tracking the second home market maintain that second homes are usually purchased from an investment perspective or a holiday perspective. They believe affordability is one of the major factors influencing the decision to buy a second home. There are only a few examples where the second home has attracted a sizeable premium and the buyers have gone for the luxury amenities in the second home.

Moreover, most second homes are purchased on the outskirts of the city, where the market rates are usually low; however, when luxury projects outside the city offer the buyer natural open spaces and refined amenities, the cost is naturally driven up. So, it also depends on the profile of the buyer and his standing in the first home market, since affordable second home is a relative term. The ideal locations for second homes are normally close to nature, tourist spots or religious places.

Holiday home drivers

Psychograph of buyers at large suggests more investment with first home than second home

Affordable locations more in demand for second homes

Parameters of second homes changing fast and it is no longer just holiday home

An investment instrument than holiday options

Metro buyers go for open spaces with second home

Second homes also serving as affordable first home for the local buyers 

Pankaj Srivastava, COO of Maitreya Realtors & Construction agrees that there is a symbiotic relation between second homes and affordability since people invest less in second homes compared to first home. According to him, it is the price factor in a city like Mumbai where the first home is quite costly, but then people like to have a second home primarily for the weekend getaway.

“For the middle income group this is all about affordability, but for higher income groups this is not always true as the luxury second homes are equally or more costlier than many of the first homes. The main attractions for such kind of second home are the space – larger homes, open spaces, a swimming pool, a badminton court, a big lawn, gymnasiums and convenience facilities  that offer entertainment and ease of living. These additional features are what differentiate it from the first homes,” says Srivastava.

Diipesh Bhagtani, Executive Director, Jaycee Homes believes that location is the first major attraction in the second home followed by the amenities. He believes the buyer may adjust his budgetary parameters depending on the location of his purchase and the amenities being offered to him with the purchase of the second home, especially if he doesn’t enjoy these facilities with his first home.

“Second homes are all about luxury and some of the most important elements the buyer will be drawn towards include lush greenery, pollution free open spaces, shopping complexes, entertainment hubs, easy transportation access and the presence of basic amenities (if not luxury amenities). Even a super luxury project can be sold as second home. When something appeals to the buyer and if he can afford it, he will definitely invest. So, whether it is a super luxury project or not, it can be sold as a second home; however, the buyer’s decision of investing in a luxury project for a second home depends entirely on his purpose for this second investment. For instance, if the buyer is looking for a vacation home purely for the purpose of leisure, his first choice might be a luxury project,” says Bhagtani.

A believer of second homes in the affordable category, Surabhi Arora, Associate Director -|Research with Colliers International maintains that buying residential property is an attractive income investment for many in an era of a volatile stock market and low return in other popular alternative investments such as gold and mutual funds, as property can fetch rental income and has an upside potential for capital appreciation in the long term.

“When choosing a residential property as first property for self-use, selecting a location often depends on considerations like distance from own work place, children’s school, native place and social amenities. However, for buying a residential property for investment as second home, the decision is generally based purely on appreciation potential,” says Arora.

The debate continues as to whether or not there is a symbiotic relation between the second home and the affordable factor. But what can be vouchsafed is that the price point of the second homes has a co-relation with the location and the amenities. Now whether the second home is also affordable or not depends on the two given factors even though the collective consciousness would like us to believe that since one invests more in the first home hence second home is more or less an affordable option for the buyers at large.

By: Ravi Sinha