India's second-home market might not be steaming, but it's still pretty hot.
According to a study conducted by Kapston.com, a Bangalore-based E-business consulting firm, second-home sales in India increased by 50 per cent from 2002 to 2007. That's slowed a bit in 2008, mostly due to the economic woes of the US, says Amar Sodhi, owner of Avatar International, a U.K.-based property brokerage.
But Sodhi also says that secondary property is still in demand. "Now it's a normal, regulated market where good stuff sells very quickly."
For many of these buyers, a second home means a respite from crowded cities, extreme heat and the stresses of work. For others, it's a quick way to generate cash. Sodhi says that some buyers flip contracts before a house is even built, despite the 15 per cent capital gains tax.
For some time, the boom has been focused on the high end of the market. But now, as another 10 million people join the ranks of the middle classes, more affordable housing is popping up, says Sodhi.
And it's not only for Indian dwellers. Non-resident Indians are buying this mid-level housing as well. NRIs can easily attain housing in India because they were born there--but they can also buy even if their parents or grandparents were born there.
Home is where the housing boom is
NRIs are different because they don't necessarily buy in resort towns or in big metropolitan areas in order to flip a contract. Many choose to go back to where they came from, says Jaideep Singh, an NRI born in Los Angeles whose father was in the Merchant Navy. Singh is now a sales associate at Seven Seas International, an L.A.-based real estate firm.
"Many NRIs have dreams of having India as a possible place to retire, where hired maid servants will run their day-to-day tasks while they relax close to friends and family," Singh says. "The home towns where they grew up always have a certain draw on their heart strings."
For NRIs who hail from Delhi, the nearby cities of Gurgaon and Noida have proved ideal spots to settle, says Singh. Not only for their proximity to the capital, but also because they're near an international airport.
Today, Gurgaon houses over 1 million residents and is rapidly expanding. The biggest attraction for part-time residents is its abundance of shopping malls. The spot has more malls per square mile than anywhere else in India, which range from luxury emporiums to centers dedicated to home furnishings.
Noida, on the other hand, is known for its IT business. As of late, however, it's been attracting second-home buyers with luxury real estate developments as well as the new 222-acre professional golf course.
An array of options
For resident Indians looking for a holiday home, two spots pop: Shimla in the North and Kerala in the South.
Shimla is a four-seasons spot. It offers holiday makers trekking in the local mountains during the warm months and ice skating when the weather grows colder. As the village is Northwest of Tibet, residences are close enough to visit traditional Buddhist monasteries. Chail, a 75-acre private resort with skiing and tobogganing, is also nearby.
The Southern state of Kerala has a tropical climate that produces lush greenery and vibrant wildlife; the land is covered in coconut palms and provides a home for tigers, elephant, deer and the native Nilgiri Tahr. Guests and part-time residents often visit the many wildlife sanctuaries or the rubber and tea plantations established during colonial times.
The key to Kerala's pristine topiary? Tourists only discovered the spot 25 years ago. Those living in the area work hard to maintain its natural conditions by preserving national parks and wildlife sanctuaries, including Periyar and Eravikulam National Park.
So whether they're seeking respite from city living in Shimla or looking for the next big thing in Noida, there's something for everyone in India--the local billionaire and the NRI alike.