Second home is where the heart is in times of stress, WFH and Covid-19

The uber rich and corporate exec are buying holiday homes by the hillside, seaside, or retreats closer to their city houses, where they can live and work peacefully amid less noise and pollution

N. Santhanam has a pretty stressful job as CEO of Mumbai’s Breach Candy Hospital. So stressful in fact, that he wasn’t quite willing to spend his cherished weekends in maximum city and was exploring pristine properties in areas not too far from Mumbai, where he could unwind and spend quality time with his family. That’s when he came across a villa at Kalpataru Amoda Reserve in Lonavala, which he eventually bought. He says, “I was clear I didn’t want to travel 5-6 hours and was keen only on a gated community as it takes care of maintenance, housekeeping and security. One set of keys always remains with the caretaker and before we go there, the agency responsible for property and facility management cleans it up and keeps it absolutely ready for us. We just need to pack our clothes and move in, much like a hotel, and we try to go there at least thrice a month.”

He doesn’t look at the Lonavala property as an investment to be sold later for a killing, but as an heirloom for transfering on to the next generation.

Many of us have dreamed about owning a second home in the hills or by the beach, few of us have been able to fulfil it. But now, the pandemic has pushed the desire to own a holiday home further, as one’s own dwelling has become the epicentre of existence, with the second Covid-19 wave and a likely third seeing companies warm up to the idea of flexi-work and WFH. Many who have a primary residence within large cities long for a retreat on the fringes where they can live and work peacefully amid less noise, congestion and pollution.

Key projects

Health, wellness and greenery are top priorities for affluent home buyers during the pandemic.

“We know of families who have lived and worked from their second homes all through the pandemic,” says Amit Goyal, CEO, India Sotheby’s International Realty. “Big farm houses on the outskirts of the city, or in hill stations like Shimla and Dehradun, or in beach destinations like Goa and Alibaug are most sought after. A one-acre farmhouse in the outskirts of Delhi is available at a price 40-50 per cent lower than an apartment at a prime location within the city. We have done several deals in these micro markets recently. With work from anywhere, second homes have become much more than a place to visit during vacations.”

The segments looking for a vacation home right now are mostly the upper middle and the upper class. Amit Agarwal, Co-Founder & CEO, NoBroker.com, says his data shows the maximum traction is in Goa, Nainital, Rishikesh, Dehradun, Alibaug, Lonavala, Kochi and Coorg. He says, “People preferring the seaside end up buying in places such as Pondicherry and Goa, those partial to the hills invest in places like Nainital, Kasauli, Dehradun and Coorg. People who don’t want to go too far away from the metro city end up taking up a vacation home on its fringes, at Lonavala and Alibaug if they are Mumbaikars or Rishikesh if they are up north.”

Top trending projects for second homes in India include the likes of DLF Samavana and Tata Myst at Kasauli, Auramah Valley by Imperial Realty & Developments at Shimla, Cedar Villas at Himachal’s Mashobra and Earthcon Himalayan Estate at Nainital. Then there are projects in the foothills such as Rishikesh’ Saiesha Belle Vista and Dehradun’s Pacific Golf estate. At a drivable distance from Mumbai is Alibaug’s Green Park Developers, Akons 54 Greens and Mahindra Lifespaces’ The Serene. At Lonavala, you have Tata Prive and Kalpataru Amoda reserve (See table for indicative price range)

The demand for luxury holiday homes in India has always been high, but has soared higher the past one year in the residential real estate segment.

Says Karan Kumar, Senior Vice-President and Chief Marketing Officer, DLF: “Since the onset of the pandemic, there has been a rise in the number of NRIs, HNIs and high-income professionals looking for luxury pads within driving distance of metros and nearby holiday destinations. With work-from-home being the new norm, geography is no longer a constraint, and hence the need for a perfect work-life balance has fuelled the concept of a second home among corporate professionals as well as businessmen.”

He says unlike last year, hotels and staycations within cities have also become a dicey proposition. Second-home buyers are now getting offered a global standard living experience, including a magnificent clubhouse, swimming pools, tennis courts, children’s play area, gymnasiums, pool room, yoga deck, cards room and business centre.

The Samavana project in Kasauli, Himachal Pradesh has been approved under Section 118 of the Land Reform Act of 1972, under which Non-Himachalis can also buy a plot. DLF has another project, The Valley, located on Zirakpur-Panchkula-Kalka Highway, 20 km away from Chandigarh. Designed by Hafeez Contractor, the integrated township has a clubhouse spread over 30,000 sq ft with swimming pools, tennis courts, children’s play area, gymnasiums, pool room, yoga deck, cards room.

Says Kumar: “With over 1,800 independent floors and over 200 plots spread across 209 acres at the foothills of the Shivalik range, The Valley offers a living experience equivalent to that of a 5-star resort.”

What you should be mindful of

Buyers must ensure they can spend at least 30 days in a year at the property, before signing the dotted line. Says NoBroker.com’s Agarwal, “People in the HNI segment aren’t too conscious about the amount of time that they can possibly spend. They only look at it as a matter of choice – the day they decide, they feel they can just pick up the car and go, and this gives them independence. But to my mind, a second home is only worth a purchase if you can spend at least one month in a year.”

What else should a buyer look for? Most people want better climate, larger open spaces, nature, quality air in homes. But these days one should look for Wi-Fi and internet connectivity too, apart from considering access to the metro city, in case one needs to head back to the city home urgently.

Carefully check the documents to see if all the permissions and clearances are in place, especially if you are investing in another city. Maneesh Upadhyaya, Chief Business Officer, 99acres.com, enlists the documents you must check. “Title deed, sale deed, tax receipts, bill clearances, registration certificate, pledged property and encumbrance certificate are a few that the seller must provide you.” Property laws in India vary across locations and navigating them is not easy. Hence, reaching out to a city-based property agent would be a good idea. If you are investing in a hill station, some additional papers may be required. For instance, for investing in Shimla, a non-domiciled buyer needs to seek permission under Section 118 of the Revenue Act, and cannot invest in the Town and Country Planning (TCP) area. Only the Municipal Corporation area of Shimla allows real estate investment to non-domiciled buyers.

99acres.com’s Upadhyaya says it would be best to consider a RERA-registered project as it will save you much trouble in future, including structural or building defects. In case it is an old project, then thoroughly research the seller’s background and ensure that all the documents are in place. Also look at the income tax benefits. If you are buying a second home, you can claim up to Rs 2 lakh deduction on the interest payable under Section 24 of the Income Tax Act 1961.

A second home can sometimes seem like a white elephant–regardless of whether you stay there one month or 12, you still have to pay maintenance for the whole year. Says Shveta Jain, MD, Residential Services, Savills India: “Maintenance charges vary from asset to asset. If the property is a part of a gated development then the outgoings will be determined by the developer depending on the amenities of the project. In standalone homes, maintenance charges will include security, power back up, gardeners, home maintenance etc and can be anywhere between Rs 40,000 and Rs 50,000 a month.”

Some developers in the second-home space offer monthly rental returns under different formats. Says Jain: “Developers may sell and lease back the property from the buyer and then operate it as a short stay or a resort. The other option is that the owner can let the property out on a revenue sharing model or on pure lease to a homestay/hotel operator and earn a monthly return. Both these models permit the owner to use the property for a fixed period in a year.”

Table: Top trending second home or vacation home projects in India

Credit: Savills India and NoBroker.com