Explained: Hill Stations Reshape the Second-Home Market Amid Residential Property Boom

2024-12-20 01:05:51

Hill Stations Redefine Second-Home Market Amid Rising Demand for Residential Properties

Hill stations like Nainital, Dehradun, Shimla, Panchkula, Kasauli, and Rishikesh are emerging as prime hotspots for second homes in India. Factors such as affordability, tranquility, lifestyle enhancement, accessibility, and promising long-term returns are driving this surge in demand, according to market data.

A Pandemic-Driven Shift

The COVID-19 pandemic has significantly reshaped India’s second-home market. Hill station properties, once considered seasonal retreats, have transformed into year-round residences. High-net-worth individuals (HNIs) and urban professionals now favor these homes for their lifestyle benefits, bolstered by improved digital connectivity and physical infrastructure.

Market data indicates a 20% increase in residential demand for second or holiday homes in hill stations over the past year. Popular locations like Shimla, Manali, Kasauli, Panchkula, Rishikesh, and Lonavala are seeing heightened interest from buyers seeking wellness, exclusivity, and scenic locales.

Rising Demand and Supply Trends

Data from Magicbricks shows notable demand increases in hill stations: Nainital (61%), Dehradun (43%), Shimla (34%), Karnal (28%), and Rishikesh (26%). Luxury villa supply is also on the rise in most areas, except for Rishikesh, which saw a 14.5% drop in residential supply.

Amar Kapoor, Founder of Terra Grande by Eldeco Group, attributes the growing interest in Rishikesh and similar locales to their appeal as serene, luxury destinations. Searches for hill station properties have surged by 25%, with urban buyers prioritizing tranquility and modern amenities.

Lifestyle-Driven Purchases

Buyers increasingly prioritize wellness, privacy, and work-life balance. Remote work trends and staycation preferences have further fueled interest in hill station homes, which now offer features like co-working spaces and smart home technologies.

“Second homes in hill stations represent more than aspirational properties—they signify a lifestyle shift toward balance and closeness to nature,” says Ankit Kansal, Managing Director of Axon Developers. The trend also offers lucrative investment opportunities through rental markets, with annual yields ranging between 4% and 8%.

Investment and ROI Potential

Hill station homes are evolving into strategic investments. High tourist footfall and robust infrastructure in areas like Solan, Kasauli, and Manali make them attractive for Airbnb and long-term rentals.

Prateek Mittal, Executive Director of Sushma Group, highlights how these properties cater to both lifestyle and financial goals. Non-resident Indians (NRIs) are also driving demand, contributing up to 25% of second-home purchases in some regions.

Catalysts for Growth

Improved infrastructure, better healthcare facilities, and enhanced connectivity are making remote hill stations more viable for extended stays. Real estate experts also emphasize the growing trend of serviced apartments and curated stays, which generate consistent income streams for owners.

Future Outlook

As urban expansion continues and wellness becomes a top priority, the demand for hill station homes is expected to grow further. These properties, combining luxury, sustainability, and financial returns, are well-positioned for sustained appreciation.

Developers are innovating with eco-friendly designs and tailored amenities, ensuring that hill station homes remain both aspirational and practical investments for buyers seeking holistic living solutions.