The concept of second homes has always been around, though often restricted to the extremely affluent.It is this class that could afford to have a home away from home, for vacationing or for an occasional weekend relaxation.
But lately, the concept appears to have gained widespread acceptance, though the going has not been very easy.Some of the first 'Second Home' projects have had their own share of troubles - whether it is the Palms Resort, or the Ambi Valley Project or even the Lavasa resort.
To understand why this concept has been gaining popularity, notwithstanding the hiccups the existing ones have faced, DNA interacted with some of the best people in this business.
They included (in alphabetical order) Brotin Banerjee, managing director and ceo, Tata Housing Development Co Ltd., Santosh Hasotkar, director, Dreamz Realty Solutions Pvt. Ltd., Ashok Menon, director, Dreamz Realty Solutions Pvt Ltd., Santosh Naik, managing director and ceo, Disha Direct, and Dilawar Nensey, joint managing director, Royal Palms India Pvt Ltd.
And what they said provided an insight into some matters that are not common knowledge.Given below are excerpts from this conversation:
DNA:Do you see the concept of second homes taking off now more than in the past?
Nensey: From my point of view, a one-word answer would be 'yes'. It is that today there are a lot of people with more disposable income. This is not just the inherently rich, who have had it all that the time and who would always have had holiday homes in a Mahabaleshwar or a Lonavala.
It has been a trend for decades before. Butin the last five to ten years, you see a new breed of people, upscale executives, people who've come through maybe various new industries that have flourished in the country.
Today, the pace of life has become such that everyone craves and needs that relaxation of the mind in terms of getting out of your current life; which is a routine of going to office and going home.
While relaxation in the city means going to a movie or going for dinner, unfortunately there are no more avenues left for the same in the city. So the answer would definitely be yes.
And yes to the extent where it isn't just a dream but a reality, where a person can put aside maybe Rs 20, 30, 40 lakhs towards something he feels will be beneficial for his daily life and something for families to enjoy in terms of bonding times and things like that.
Naik: We started around seven years ago. What's interesting is that the term 'Second Home' was coined by Disha Direct. People used to call it a weekend home or a bungalow. When we started this, we did not think of it as a weekend home or a bungalow but as more of a second home.
People are looking for relaxation and our research around a year ago showed that within Mumbai and Thane there is a demand for around two lakh second home units and there is a supply of only 5,000 to 6,000 units a year. Thus, there is a huge demand-supply gap.
In the next 20-25 years the demand will be good but the land will not be there. It is a great industry to be in. A lot of developers are expected to enter this industry and people will thus get better and newer products at every level. It is a great industry to be in.
DNA: You spoke about how land may disappear. Just recently we published a conversation on Panvel development. A lot of land is going to be released in this region and if the Nhava Sheva link bridge comes up, it's going to perhaps be huge development because the time taken will be very less. Do you think there will be paucity of land?
Naik: Again, we are talking about first homes rather than second homes. That would become more of a first home rather than a second home situation. Because of the airport there is a lot of positivity in that area.
Second homes are a different market altogether. Adding one thing to this is that people who are taking a property as a second home will, within five to 20 years, take it on as a first home.
In Talegaon, where we started five years ago as a second home situation, we sold around 2,000 homes as second homes. All of them are into first home situations right now.
Shahapur and Boisar [on the outskirts of Mumbai], which were second home destinations, are places where now every second day there is a first home project launch. Karjat has good first home projects.
Shahapur will become big. So, these destinations were our second home destinations. But, within 5 to 20 years these will become first homes. So there is a transition that takes place and this transition has already begun.
Nensey: You mentioned Amby Valley earlier in terms of why it hasn't seen the kind of success that one would have hoped. I think one of the key parameters of selling a leisure property or a second home to someone is cost escalation. It's not that a person cannot afford Rs 2 crore or Rs 5 crore. Affordability exists.
You have to make his decision-making process a whole lot easier. If I can sell you something worth Rs 20 lakh, you are likely to think about it for two days. If I sell you something for Rs 4 crore, you may either completely shut it down or say this is a little more than I want to chew at the moment. I will defer this decision. So what happens is that you haven't got him as a client, which is step one.
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