While I write this, I guess, this isn’t the right time or psychological environment for a subject like this, considering the country and its people are in the midst of one of the most challenging medical emergencies witnessed in modern history. However, we are all confident that we shall very soon overcome the pandemic and get back to our regular life, having learnt precious life lessons.

So, when we go back to our normal lives, all of us will yet again travel through the Maslow’s Need Hierarchy. And few of us, having travelled the first three stages of the Need Hierarchy Table, which are Basic Needs (Physiological Needs and Safety Needs) and Love and Belonging Needs, will experience the Esteem Needs.

Esteem needs are generally fulfilled by buying luxury cars, multiple apartments, going on exotic holidays, engaging in expensive social activities, splurging on life events, buying prestigious club memberships, splurging on luxury brands and sometimes investing in second or leisure homes.

The second home/leisure home market is still mostly unorganised in India. In a few high-traffic tourist destinations like Goa, the market has evolved to some extent, but on the overall, both from the demand and the supply sides, there is tremendous scope of growth in this segment.

So what basically are second/leisure homes?

These are residential units which could be in established tourist location, weekend locations, locations which are in a few-hour drive from the first home, locations which are high on greenery, next to rivers or waterbodies, on the hills, next to wildlife reserves, or maybe, inside a well landscaped very large township project a bit away from the city. These units are usually villas, bungalows, row-houses, apartments in various sizes and configurations depending on the location and price.

Does it make sense investing in a second/leisure home?

Well, the answer is, yes.

Reasons being, real estate is always an appreciating asset class. During some cycles, real estate may stagnate but on the long term, you cannot go wrong with real estate. In addition, if you are investing in a second home, instead of buying yet another apartment, within the city, you get the opportunity to use the second home/leisure home to relax, get away from the grind, spend quality time with friends and family, re-connect with nature, de-stress, re-orient and get back to life refreshed. All this while you own an appreciating asset.

Add to the above the fact that gradually, with the inroads made by digital platforms like AirBNB and scores of other travel and leisure platforms, which specialise in renting out leisure homes, there is gradually an opportunity opening up of being able to earn a significant rental income from the second/leisure home. The returns from renting out second homes in an organised manner, in most cases, could be multiple times higher than a standard residential lease/rental return which on the average would be a maximum of 5 per cent in the best-case scenario.

So, as a country while we get back to high growth levels when the virus is controlled, which will generate higher disposable incomes in higher number of families, more families will graduate to the Esteem Needs category of Maslow’s Need Hierarchy, it can be predicted that second homes as an organised real estate asset class will evolve at a decently higher speed. More families would seek higher numbers of weekend holidays and in general multiple holidays, much of which will be short tenure getaways. This will hence provide more fuel for all the stakeholders, which includes developers, buyers, online platforms for leisure rentals to enhance activity levels within this asset class.

From the supply point of view, except for very limited markets and developers, second homes/leisure homes as an asset class has not been explored well yet. When the demand will be overt, more developers in more markets will invest bandwidth to figure out this asset class and will hence start creating products to address the market. Majority of the demand, which is latent in nature now and hence covert in general, will be in the Rs 40 lakh to Rs 1 crore kind of ticket size. A decent percentage of demand will also be in the sub-Rs 40 lakh ticket size, which the developers will have to crack as to how to successfully and profitably create products in that segment.

From the developer’s creative satisfaction point of view, the second home projects are extremely rewarding. Second home projects can be very rewarding from the point of view of being able to utilise brilliant architectural designs, landscape ideas, amenities and basically the joy of being able to create an awesome project. As the demand for this asset class grows, the second home projects will evolve very fast and some of them can be benchmarked internationally.

Going forward, the fact remains that all of us travel the Maslow’s need hierarchy and a whole lot of us will reach the Esteem Needs level gradually. It is only a matter of time wherein the second homes/leisure homes start to feature in the first quartile of the Real Estate Asset Class from which a consumer can choose to make his/her real estate investment.

The Author is Director Sales and Marketing, Shristi Infrastructure Development Corporation Limited. The views expressed by the author in the article are personal.