Nethra Vishwanath is as gleeful as she can be, as it has been two years since she shifted lock, stock and barrel from Mumbai to Goa. Her husband had taken up a job there, making her take the big move. After initial nervousness over her career, she landed a job in the budding manufacturing sector of the beach state.
But that's not what she is cheery about. "We sold off our 1BHK (one bedroom hall kitchen) home in Andheri (Mumbai suburbs) to buy a large three-bedroomed home in the city," she says.
Digital Nomads, Rental Yields
While not many people are as bold as Vishwanath, many Indians have been living at least a sliver of their Goan dream since the pandemic. "The remote-working trend during the pandemic ushered in a wave of Indian tech workers, 'digital nomads', and various other professionals to the state, with many opting to stay for extended periods," says a recent report by Housing.com.
So high is the demand for extended staycations that rental yield of high-quality properties is three to four times that of a Mumbai property. The property prices of Goa are lower as compared to a top city, aiding the yield. Rental yield is the percentage of the property value received over a year through rental earnings. But that is not the only reason. Rents in Goa are rising due to high demand too.
As per data by real estate consultancy Anarock, the average rental yield of a Goan property is as much as 6.9% as of second quarter of 2024, growing from 4.9% in 2019.
"The average rental values in key markets in Goa have seen anywhere between 29% to 36% jump over the last five years (between 2019 and Q2 2024). On a half-yearly basis, there has been anywhere between 4% and 7% rise in rental values. Rising rental values are a major reason for the hike in rental yield in Goa in the last five years," Neelabh Verma, senior vice president of emerging geographies at Anarock Group, says.
Villas are able to yield rental returns as high as 8%, significantly surpassing the average 2–3% in top-eight cities, as per Housing.com report named 'The Bharat In India'. Apartment-weary urban Indians are willing to spend top dollar for villas in Goa. Renting homes to multiple tenants over the year is a more lucrative business than signing 11-month leases in large cities.
"Goa's popularity as a holiday spot for short-term rentals contributes to its high rental returns. The state produces higher yields than many affluent cities due to its vibrant lifestyle, breathtaking landscape, and strong demand for vacation homes. The lack of excellent rental properties also drives up rental costs," says Sandeep Ahuja, chief executive officer of Atmosphere Living, a property developer with projects in Goa.
Remote Working May Go But Vibe Remains
As many companies are calling people back to work, some of the growth in rental values may flatten out, but not too much, according to experts. Because it is not just the nomads who are lining up to rent villas.
"The end of remote working might reduce the demand for villa rentals in Goa, but it won't necessarily put an end to it. Goa remains a popular destination for vacations and short-term stays, so the market will likely adapt to cater to different types of tourists and travellers," Ahuja says.
As per Housing.com, tourist footfall grew sevenfold between 2011 and 2019 when it stood at 7.1 million. After a pandemic drop, air passenger traffic soared to 9 million in financial year 2023. This will help sustain the demand-supply gap for properties.
"At many tourist spots across the country, particularly Goa, rental demand remains high because of its vibe. Being a beach destination, many prefer to go on official trips or vacation with family. And gone are the days when people stayed at hotels, they also now prefer to live in rented places for convenience," adds Verma.
NRI Investors Eye High Yields
The lucrative rental yields are also bringing in new sets of investors into the property market as well like high-net-worth individuals, business as well as tech professionals. Apart from holiday homes and villas, new developments in locations like Assagao, Anjuna, Siolim and Calangute are emerging as coveted investment destinations for luxury villa properties with amenities.
Investor interest is also being seen in Porvorim, Panjim, and Vasco da Gama. Margao and Salcete are also witnessing end-user traction for apartments, as per Housing.com. This has also spurred property prices across key micro markets — whose capital values are now on par with that of areas in top eight cities.
"It is expected that localities proximate to northern tourist hotspots will sustain their appeal, with investor interest remaining robust, albeit predominantly from domestic and NRI demographics," the report adds.
For instance, Anjuna, commanding the highest property prices in Goa (Rs 17,000–19,000 per sq ft), is comparable to key micro markets, such as Golf Course Extension in Gurugram (Rs 15,000–17,000 per sq ft), and Thane West in the Mumbai Metropolitan Region (Rs 14,000–16,000 per sq ft), as per data from the report.
Even as prices are growing, their appeal will not go away so soon. "The sustained demand from both local and foreign purchasers is expected to maintain the recent price spike in select Goan micro markets. The continued growth potential is influenced by various factors, including restricted land availability, continuous infrastructure upgrades, and Goa's increasing appeal as a top destination," says Ahuja.
Also Read: The Indian Case For A 4-Day Week
Senior Communities, Co-living & More
Apart from holiday homes, Goa lends itself to a wide variety of alternate real-estate investments like senior living, thanks to its calm surroundings and good medical facilities. Co-working spaces, too, might get a boost due to infrastructural developments and a new Manohar International Airport in North Goa is aiding more large-scale developers.
"Other alternative services, such co-living facilities and health retreats, might also be developed to meet a variety of requirements and improve the state's real-estate market," says Ahuja.
Even as large developers come in and increase the supply of properties, yields will only stabilise but remain attractive, Verma says. After all, there are few markets that offer the view of a beach, laid-back lifestyle all while getting the work done.
Katya Naidu is a senior business journalist who writes about equity markets, startups, energy, infrastructure, real estate and healthcare.
Disclaimer: The views expressed here are those of the author and do not necessarily represent the views of NDTV Profit or its editorial team.
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