GOA : THE SUNSHINE STATE OF THE COUNTRY

BY Realty+

Rudyard Kipling was mighty wrong when he said, "Oh, East is East and West is West, and never the twain shall meet". But then, he had never been to Goa. For here is where the twain do meet.

Acclaimed as a tourist haven and a mix of Portuguese and Konkani culture has given a unique character to the real estate of the state. The fast developing physical and industrial infrastructure and ultimate connectivity especially with the upcoming airport in Goa, the realty market has seen a further boost in demand. 

The Goa government’s recently announced draft Goa Industrial Growth and Investment Promotion Policy, 2022 with emphasis on IT and ITes, high-end hospitality, niche tourism, food and agro-processing industries will give further impetus to the economy of the state and in turn the real estate demand.

Recently, the state has seen a steady influx of people from metro cities who have invested in either a second home or luxury villa for residing in Goa. Furthermore, with an established base for the pharmaceuticals industry and IT as well as hospitality and tourism sectors on rebound, there are multiple growth opportunities for working professionals. The most positive aspect is the access to all major metropolitan cities in India.

Lindsay Bernard Rodrigues, CEO & Co-Founder, The Bennet and Bernard Company, known for luxury holiday homes in Goa elaborates, “Goa attracts NRIs because of its unique culture, lifestyle and the value for money it offers. And India’s real estate sector has always received significant investment from NRI investors. With depreciating rupee, volatile conditions exposed due to the pandemic and a depression predicted in the US, NRIs find it safer to invest in India. This generation of techies, successful entrepreneurs and professionals, having grown up with vast technological, global and economic exposure, are quickly moulding the face of real estate as they resort to extensive research before settling for the right choice. Moreover, NRIs are becoming a force multiplier in fuelling luxury housing demand, which is rooted in factors such as growth in disposable income and a shift in approach to life. UAE, GCC, USA, UK, and Canada are the biggest source of NRI residents who invest in India, with the majority coming from GCC alone.”

THE IMPACT OF PANDEMIC ON GOAN REAL ESTATE

The pandemic had rattled the growth of the real estate industry. However, the sector has been growing at an unprecedented rate since the end of the second wave. There have been many roadblocks, and trade pundits thought that the growth would be throttled. Despite the challenges such as growing input costs and increasing interest rates, the growth graph has been maintained.

Aditya Kushawaha, CEO and Director, Axis Ecorp shared this thoughts, “Before the pandemic, people wanted their homes to be near their workplaces so that they did not have to spend hours commuting. With most companies adopting hybrid work culture, homebuyers are now more upbeat about locations that are closer to nature or holiday destinations. There is an increased focus being laid on work-life balance, opulent living, a better quality of life and future security. As a result of this trend, real estate markets in some of the smaller cities and holiday places have witnessed good traction. Demand for real estate in some of the cities such as Coimbatore, Kochi, Visakhapatnam, Goa and Shimla has propelled. The biggest upswing has been witnessed in the luxury and holiday home segment. The pandemic has reset the priorities of people, and they want their future homes to be practical, spacious and feature-packed. As people continue to focus on health and well-being, homes that offer a holistic lifestyle and also in demand.”

Dhimaan Shah, Founder of Isprava & Lohono Stays shared similar sentiments, “The customer dynamics towards home buying is rapidly evolving. One of the most recent changes observed in the luxury residential segment  is the need to invest in a home that is synonymous with an opulent lifestyle and high-quality living. The pandemic worked as an impetus for HNIs and UHNIs, increasing their desire to reside in homes that offer exclusive and private access to amenities, unmatched service standards, and unprecedented luxury. Thus, leading to a rise in investment towards homes that offer ample space and lush landscaping in locations with better air quality. These elements are rapidly becoming essentials for home buyers due to flexible WFH (work-from-home) culture. They are looking to splurge in lucrative non-urban locations that are distant from densely populated urban cities. An increase in interest in upscale, quiet, and comfortable real estate is evident as people want to escape from the bustle of urban areas. Additionally, the segment of second houses and holiday homes has grown in popularity among buyers, riding the wave of financial possibilities. Investors think that locations like Goa provide economical entry costs, more flexibility, high profits and an incredible access to privacy. Large condominiums, villas, farmhouses, and bungalows are particularly well-liked among homebuyers in Goa that offer access to private unshared spaces like swimming pools, lawns and sit outs. Isprava was conceived to provide homeowners best in class amenities wrapped in unparalleled design aesthetics that foster luxury living in its truest sense.”

Paul Dass, OBE – Founder & CEO Mayaland Homes in Goa had spoken to Realty+ last year and had expressed that there has been a positive impact of the pandemic on luxury real estate segment as the high spenders are moving to Goa since international travels are on hold and Goa has become the most sought destination to live and travel. “The concept of work from home has allowed many to relocate their work stations to Goa. We at Mayaland Homes have now created workspaces within our plans in all future projects,” he said.

THE INVESTMENT OPPORTUNITIES PRESENTED BY GOA’S REAL ESTATE MARKET

In recent years, the work-from-home culture has gained prominence and enticed people to scout for locations with serene, comfortable and sparsely populated surroundings. Real estate investment opportunities for second homes being offered in Goa have become more popular during this period.

Dhimaan Shah added, “The hybrid work culture, which is increasingly appealing to many C-suite professionals and HNIs looking to invest in residences with traditional yet contemporary aesthetics and a calming atmosphere to dwell in, is fuelling Goa's booming real estate market. Home buyers are focused towards making wise investment choices and hence are finding second homes worthwhile as they provide the best long-term returns. Furthermore, HNIs and UHNIs are inclined towards properties that have added service layers of round-the-clock services, personalised living experience and privacy. Buying such luxurious homes avail the owners ample opportunity in the form of handsome rental gains. Isprava’s rental arm Lohono Stays offers end-to-end assistance through its rental management program.”

Even before the pandemic hit India, the tranquil charm of Goa has attracted many investors looking to buy vacation or holiday homes was rightly pointed out by Lindsay Bernard Rodrigues. “People are now open to large, spacious holiday homes as work from home is the new normal. Buyers also seek their own homes looking for privacy, safety and good health and a calm and peaceful existence, away from the din of the city. As a result, enhanced demand for holiday homes can be observed as city inhabitants consciously seek opportunities to take a break from their fast-paced lives. The Covid-19 outbreak has prompted people to shift focus to personal value, like a holiday home, which enables them to work seriously at an owned place and maintain a healthy work-life balance.”

There has been no dearth of investment opportunities in real estate. The housing sector has been doing tremendously well over the last few quarters in both metros and Tier 2/3 cities. However, the recent trends suggest that investing in real estate in tier two and three cities has fetched better ROI. Aditya Kushawaha stated, “Real estate in Goa has grown over 4-5 times ever since the pandemic. Favourable climate, great connectivity, infrastructure and good electricity and internet connectivity are some of the reasons why people are investing in this beach haven. Earlier, people were looking at Goa as just a weekend getaway, but it has now changed into an ideal place to have a second home. People believe that Goa offers a good lifestyle, culture, value for money and better rental yields. Goa also provides a wide range of options to potential home buyers. From a luxury villa to a studio apartment, there is something for everyone."

MAJOR CHALLENGES FACING THE REALTY SECTOR OF GOA

Paul Dass, in his interview mentioning the challenge of Goan real estate market had said, “The challenge is to build environmentally sustainable structures and preserve the environment at the same time. Maintaining a good green count is also a challenge as we preserve as many trees as possible during the construction phase. In our current project, we have kept provisions for the tree to grow within and around the structure of the house. Another challenge is the long monsoons in Goa and harsh summers, which slows down the pace of work.”

According to Aditya Kushawaha one major challenge that the industry as a whole is dealing with is the soaring prices of raw materials. “The government has announced a few measures to curb the price rise, but the pressure continues to mount on developers to deliver existing projects within set budgets and stipulated timelines. One big challenge that Goa in particular is facing from a real estate perspective is that the demand has grown exponentially in the last few years. The inventory is fast running out, and homebuyers are settling for whatever they can lay their hands on.”

Lindsay Bernard Rodrigues added, “The surge in Covid-19 cases has dealt a blow to the real estate, with homes becoming more expensive and running into delays. According to analysts, the cost of buying a home has increased due to the increase in prices of steel, cement, labour and other supplies – which have seen an increase of 10% - 20%. With cash flows affected, workers returning home and staying away, project deliveries are invariably delayed, and developers face financial challenges.”

“Building a home in a prestigious non-urban location is different from purchasing a property in a major city. It might be difficult to locate the finest resources and services and to establish a base in an unfamiliar destination. In Goa, anyone can purchase a piece of land, but the challenge lies in finding a land with clear titles for development and navigating through the complex laws,” said Dhimaan Shah.

THE GROWTH POTENTIAL OF THE CITY

Real Estate sector is witnessing a healthy increase in demand in 2022 and this momentum is expected to continue. Despite pandemic exigencies, the sector has shown resilience and steady growth from 2021. The real estate sector in India is set to experience significant growth in the residential segment. Certain projections state that the sales momentum is expected to increase in 2022 as prospective homebuyers will continue to prefer bigger homes, better amenities and attractive pricing will keep them interested in sealing the deals. Additionally, the luxury housing market is poised to touch new heights in the coming years.

“To boost its real estate, Goa has also been focusing on infrastructure development over the last few years. It has witnessed whopping investments made by the government on its roads and has come up with standard highways, hospitals and schools. The under-construction Mopa International Airport in North Goa is expected to be completed soon, due to which Goa will witness a surge in access to many parts of the country and the world. In the last few years, Goa has also seen an influx of start-ups following the announcement of the Goa-Startup Policy. There are also multiple Special Economic Zones (SEZs) which usher industrial growth in Goa and eventually fuel real estate investment in the real estate sector. This will spur investment in Goa’s holiday home market,” informed Lindsay Bernard Rodrigues.

“The upcoming infrastructure projects, such as the opening of the MOPA airport, will boost the tourism and real estate potential of the state. Goa is well known for its beaches and natural beauty. Adequate steps need to be taken to preserve these spots and maintain the air quality and quality of life in the state,” added Aditya Kushawaha.

“The pandemic in a way acted as a catalyst towards increasing the demand for properties in Goa. This is observed across the wide spectrum of studio apartments to villas and more, which are swiftly selling. A high quality of life combined with a safe, largely uncrowded work environment is luring people from urban cities to non-urban locations. Goa is a desirable location for investment because the residential market there is growing year after year. Being the most popular tourist destination during the two years of the pandemic, Goa’s land values have soared eightfold in the last ten years,” stated Dhimaan Shah.

“The fusion of cultures along with its charming surroundings and spots has given Goa a unique potential of being an international tourist destination and has resulted in making Goa the most sought-after place to live in India and this is one of the biggest opportunities in the Goan Real Estate market, were the views of Paul Dass.

GOA REALTY TRENDS 

Goa has seen an uptick in demand for premium built-up properties in the last 2-3 years and there has been a year-on-year value appreciation of the asset. The properties also offer great potential for earning rental income, especially for holiday rentals during the holiday season. This has created a niche for holiday villas, row houses and luxury apartments in the state. The rental yield of properties across Goa has seen an increase in the last two years. Additionally, properties near a beach demand 5-10 percent higher rentals than the market rate. While people with disposable income look at investing in affordable homes, the NRIs and HNIs look to invest in more luxurious properties that match their lifestyle.

Split into two districts; North Goa is more of an investment market while south Goa is the more affordable option for home seekers. South Goa is more conventional and value for money whereas North Goa with more commercial development offers better resale and rental values and offers a number of investment options from Portuguese villas to studio apartments along the beach.

Some areas that are showing the upward trend in Goa include Siolim, Nerul, Candolim, Assagao, Tivim, Alto Porvorim and Marcel. The Central Goa comprising the capital of the state Panaji is well connected with North Goa and South Goa, houses Dabolim airport and thus has witnessed a steep rise in premium on properties in and around this region.

The upcoming locations that will see increasing real estate growth in coming years include Morjim, Ashwem, Mandrem in North Goa and the Kadamba plateau and the Dodamarg on the Goa-Maharashtra Border close to the upcoming Mopa Airport. 

GOA AN IDYLLIC DESTINATION FOR SECOND HOME, A VACATION HOUSE AND A RETIREMENT HOME HAS SEEN MANY NEW TRENDS EMERGING IN THE PAST FEW YEARS. FROM THE IMPACT OF PANDEMIC AND NEW GOVERNMENT POLICIES TO LATEST INFRASTRUCTURE DEVELOPMENT AND EMERGENCE OF NEW MICRO MARKETS, A LOT HAS HAPPENED IN LAST FEW YEARS. 

GOA’S REAL ESTATE TREND IS CHANGING, FROM PURELY A SECOND HOME INVESTMENT DESTINATION, PEOPLE ARE NOW BUYING HOMES FOR SELF USES FOR A PERFECT WORK-LIFE BALANCE AWAY FROM METROS. MANY NATIONAL REAL ESTATE DEVELOPERS TOO HAVE LAUNCHED PROJECTS IN THE STATE WITH AN AIM TO DEVELOP MID-INCOME AND LUXURY HOUSING PROJECTS. 

GIVEN THE HUGE DEMAND FOR HOUSING IN GOA, THE REAL ESTATE MARKET HERE IS PREDOMINATELY CENTRED ON RESIDENTIAL PROJECTS. HOWEVER A FEW OF THE DEVELOPERS ARE NOW FOCUSING ON COMMERCIAL PROJECTS, AND RETAIL SPACES AS ALSO EXPLORING WAREHOUSING PROJECTS IN THE STATE.

EVEN BEFORE PANDEMIC THERE HAD BEEN A STRONG INTEREST IN GOA’S REAL ESTATE SECTOR BUT LARGELY IN THE LUXURY SEGMENT. WITH PANDEMIC ACCELERATING THE DEMAND FOR HIGH-END PROPERTIES, AFFORDABLE AND MID-RANGE HOUSING HAS TAKEN A HIT.

THE RECENT FINDINGS OF A NATION-WIDE SURVEY BY CREDAI MENTIONS THAT IN GOA 24% OF THE BUILDERS ARE BULLISH ABOUT SALES IN 2022, 38% OF THE BUILDERS HAVE “CONSERVATIVE” PROJECTIONS FOR THEIR TURNOVER AND 38% REMAIN CAUTIOUS ABOUT THE DEVELOPMENTS IN THE INDUSTRY AND SALES. 

Tags : Goa State Country Destination Rudyard Kipling Tourist Government Lindsay Bernard Rodrigues CEO & Co-Founder The Bennet and Bernard Company Goan Real Estate Aditya Kushawaha CEO and Director Axis Ecorp Dhimaan Shah Founder of Isprava & Lohono Paul Dass OBE Founder & CEO Mayaland Homes Investment Opportunities