Goa's Second Home Market Thrives with 5-8% Rental Yields and Demand Rises for Gated Villas: Savills India
12th June 2024: Goa has emerged as a destination of choice for second home buyers owing to high rental yields ranging from 5-8% approximately. Savills India has witnessed a decisive trend where individuals are choosing gated villas along the coastal belt, with sizes ranging from 2,000 to 4,000 sq. ft. for 3-4 bedroom units. Plot sizes for these gated villa projects vary from 190 to 400 sq. mtr. Reputed developers in Goa include Isprava Homes, Vianaar Homes, Veera Developers, Bennet & Bernard and Acron Homes, Ashray, Bennet & Bernard and so on.
With the advent of asset management firms and hospitality operators managing individual homes, buyers for second homes are not only end buyers but retail investors seeking both rental returns and capital appreciation. Also, at one point Goa was primarily known as a retirement destination for older generations or just a holiday destination. However, recent trends show a shift - younger professionals, especially from major cities like Mumbai, Delhi and Bangalore and other prominent cities are now moving to Goa. These new residents often work in creative fields or are digital nomads seeking a better work-life balance.
The supply of villas in Goa has shifted, with the standard size decreasing from 500 sq meters to 250 sq meters over the past five years due to rising land prices. Premium views remain desirable but scarce, and investment motives now often outweigh end-use objectives. While beach proximity is still preferred, locations like Assagaon and Siolim attract lifestyle-conscious buyers who prioritise address and quality over beach access.
The average home size in prominent locations has fallen to 300 sq meters, while emerging areas still offer larger properties. There are two main buyer categories: investor-aspirational and end-user, including professionals, industrialists and those seeking capital gains deployment.
Vacation rentals in popular micro markets yield high rental income, providing competitive ROI and steady income for investors. Demand for private villas, favoured by families and groups, is rising. Savills India's research indicates that buyers are primarily individuals aged 30-60, including both salaried professionals and businessmen. These buyers are attracted by rental returns and capital appreciation, achieving gross yields of 10-12% per annum for wealth diversification. Today, it can be noted that premium gated villas in locations like Assagao and Siolim are priced equivalent to the homes in grade A locations in South Delhi and South Mumbai.
Capital values (in INR per sq. ft.) for villas:
Clusters
Q2 2022
Q2 2023
Q2 2024
YoY change 2023-22
YoY change 2024-23
Grade A
15,667
20,914
25,504
33%
22%
Grade B
14,564
17,286
22,410
19%
30%
Cluster
Locations
Grade A
(locations that are the most sought after and demand)
Anjum, Arpora, Baga, Calangute, Candolim, Vagator, Morjim, Assagao, Siolim, Mapusa, Pilerne, Reis Magos, Caranzalem, Dona Paula
Grade B
(locations that are slightly new and where demand is currently picking up)
Aldona, Moira, Nachoinola, Panjim, Chapora, Nerul, Mandrem, Parra, Saligao, Verla Canca, Saipem, Guirim, Tivim, Bicholim, Penha de Franca, Sangolda, and Bambolim
Shveta Jain, MD, Residential Services, Savills India said “As part of Goa Home Fest 3.0, we are offering a platform for sellers to showcase their best homes and for buyers to search for the choicest homes basis their requirement. We have curated the showcase to include ready-to-move-in and under-construction homes in Goa, covering both premium coastal locations like Anjuna, Vagator, Candolim and quieter ones like Nachinola, Moira and others in North Goa. The showcase also features independent bungalows and Portuguese homes, which highlight the history and culture of Goa. The fest is a great opportunity for both active and passive searchers to fine their dream first or second home or to fulfill their investment objectives.”
As Goa continues to grow and attract tourists, its commercial property market has also been on the rise. The combination of work and leisure makes it an ideal location for setting up commercial office space in Goa, especially for sectors like hospitality, technology and creative services. The appeal of the commercial property in Goa lies not only in their potential rental yields but also in their long-term value appreciation. As the state's economy diversifies and its infrastructure improves, the demand for commercial property for sale in Goa is expected to grow, making it a favourable investment choice.
About Savills India:
Savills is a premier professional international property consulting firm headquartered in London with a network of more than 40,000 people in over 700 offices across the Americas, Europe, Asia Pacific, Africa and the Middle East. Savills India is a group company of Savills Plc. with full-service offices in Bengaluru, Mumbai, Delhi NCR, Chennai, Pune, Hyderabad, Ahmedabad and Kolkata. Savills serves Occupiers, Investors and Developers of real estate with a host of services including leasing, advisory & transactions, project management, capital markets, valuations and research & consulting. These services cover various asset classes such as commercial, industrial, warehouses and logistics, data centres and residential. For further information, please visit https://www.savills.in/
