Goa emerges as an investment destination

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Goa

Known for its beaches, carnivals and laidback lifestyle, Goa is undoubtedly the most popular holiday destination in the country. Although the state’s real estate market is not something that makes the news often, it has in fact come a long way and promises high returns on investment.

Goa has traditionally been a favourite investment market for high net worth individuals and non-resident Indians (NRIs). Besides, many buyers from metro cities have been attracted by the prospect of a second home in the land of sun, sand and sea.

Arvind Kapoor, Director – Residential Services India, Colliers International India says, “Property prices in Goa are less compared to the metros and Tier I cities. This makes it one of the popular destinations for investors to block their money in the growing real estate market, as they are sure of getting high yields. Although the market has stagnated and there has not been any exponential growth in the last year, it has now become a focus area for a lot of developers from Mumbai, Pune, Hyderabad, Bangalore and NCR.”

Realizing the immense scope of growth, leading national-level developers such as K Raheja Corp, Nitesh Estates, Prestige Group, DB Realty and Peninsula Land have launched residential projects in Goa. A surge in demand for apartments and plots has led to emergence of many local players such as Acron Developers, B&F Realty, Riviera Constructions and Sardesai Group.

North Goa emerging as an investment region

Being the main hubs of tourism, areas of North Goa have become favourite with investors. These are seeing a number of new launches. With tourist and commercial centres, these areas promise better rentals and resale value.

James D’Souza, Manager – Marketing & Sales, B&F Realty says, “With prominent restaurants, markets and night clubs concentrated in the north, buyers and investors prefer areas of North Goa such as Calangute, Baga, Anjuna, and Siolim. In addition, a few projects are also coming up at Kadamba Plateau. New project launches in these areas feature a wide variety of dwellings such as 1 and 2 BHK apartments as well as independent villas.”

Property prices vary depending on exact location, amenities offered and developer repute. The basic sale price (bsp) in new projects, such as Amber Gardens Phase 2 by B&F Realty, is around Rs 5700 per sq ft. As in the case of hotels and resorts, the relative advantage of one property over another is proximity to the beach.

Bambolim is also witnessing realty development. A limited supply of villa projects in nearby regions has fuelled growth in this part of North Goa. Central Goa, one of the most established and mature locations in the region’s residential market, is also a good market for investment in the current scenario, says Kapoor. Panjim and Dona Paula are sought after investment destinations for high-net worth individuals.

As compared to North Goa, property prices are lower in South Goa. This micro-market is therefore better suited for end-users. While independent houses and high-end villas continue to woo big-ticket investors, 1 and 2 BHK apartments are coming up in a big way in many of the upcoming projects. Local residents also prefer buying land and constructing homes for end use. Projects that are selling subdivided plots are seeing a good response from buyers.

Here are some of the popular upcoming projects:

Project

Developer

Configuration

Area

Price (in Rs)

Amber Gardens 2

B&F Realty

1, 2 BHK

678-1106 sq ft

39.08 Lakh onwards

The Palms Socorro

Virani Ventures

1, 2 BHK

851-3841 sq ft

43.5 Lakh – 3 Cr

Sardesai Mayflower Enclave

Sardesai Group

2, 3 BHK

1467-3118 sq ft

71.8 Lakh-1.46 Cr

Riviera Sapphire

Riviera Constructions

1, 2, 3 BHK

775-1720 sq ft

27.04 Lakh-1.15 Cr

Chandra Emerald

Chandra Developers

1, 2 BHK

861-1248 sq ft

27.61 Lakh onwards


Concerns of local buyers

The vast number of residential projects, especially in areas of the north, has become a subject of concern for planners, environmentalists and housing experts. In recent years, there has been a steady increase in the number of luxury projects, gated residencies and mega housing complexes across the countryside. A majority of the units in these projects remain vacant for most part of the year. As per a 2011 official census, a quarter of the 500,000-odd registered homes in Goa were vacant.

In addition to vacancy levels, the rising prices of real estate in the state are discouraging the native population, who are unable to buy a house for themselves. Addressing the housing needs of locals, the state government plans to shift focus to need-based, affordable housing and construct homes for the middle and low income groups.

Future outlook

The residential market of Goa has stagnated in recent years due to a mismatch between demand and supply. While there is a good amount of supply in the market, sales have been poor, resulting in a slowdown. In particular, the premium segment of high-end luxury villas has seen a considerable decline. With price tags in excess of Rs 2 crore, these are losing out on buyers due to the large ticket size and slow growth in capital values.

Despite slow growth in capital market, prices continue to be stable or head upwards owing to scarcity of land and development restrictions. With the state capital Panaji set to become a smart city, real estate development in Goa is expected to increase in near future.


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