Demand for luxury second homes on the rise

Shift led by higher incomes, focus on wellness

- VAISHALI DAR

MORE INDIANS ARE now opting for residential properties that serve as second homes and become lifestyle and investment assets. Destinations such as Goa, Alibaug, Kasauli are some preferred spots, as factors like improved connectivity, rising disposable incomes and growing focus on wellness and work life balance collectively fuel this growth.

As per Kotak Private Luxury Index released in December, luxury second homes in vacation-friendly destinations are becoming increasingly popular among ultra-HNIs, with three out of four now owning secondary or vacation homes. These homes serve a dual purpose as lifestyle retreats and premium short-stay rental assets.

Market data by real estate consulting firm ANAROCK Group states the luxury second-home market segment is valued at over $3 billion, growing at more than 20% annually. Prices of luxury homes in the top 7 cities averaged around ₹20,300 per sq ft as of 2025. Delhi-NCR led this surge with a remarkable 72% jump, moving from nearly ₹13,450 per sq ft in 2022 to ₹23,100 per sq ft today. Mumbai Metropolitan Region followed with 43% growth, closely trailed by Bengaluru at 42%. Anuj Puri, chairman, ANAROCK Group, said post-pandemic lifestyle shifts are driving the boom.

"The luxury second-home market is thriving because the wealthy want retreats from urban chaos, homes that focus on health and wellbeing and allow them to work seamlessly from home," he said.

"INVESTORS ARE DRAWN by rental yields as high as 5-8%, compared to the usual 3-3.5%," he added.