Summary of this article
ANAROCK group estimates the luxury second-home market at over $3 billion, growing at approximately 20 per cent annually, making it one of the fastest growing segments in the Indian real estate paradigm.
Hill locations such as Himachal and Uttarakhand have emerged as leading destinations for second homes amongst the affluent buyers.
While Himachal Pradesh and Uttarakhand have emerged as the most prominent destinations in this space, the luxury second-home trend is not confined to hill stations alone.
India’s stable macroeconomic environment, rising disposable incomes and evolved lifestyle priorities amongst the affluent high net-worth individuals (HNIs) and ultra-high net worth individuals (UHNIs) have prompted the emergence of various new trends in the Indian real estate sector. One such trend, as corroborated by the Kotak Private Luxury Index, which has gained traction in recent times, has been the growing momentum of luxury second homes. ANAROCK group estimates the luxury second-home market at over $3 billion, growing at approximately 20 per cent annually, making it one of the fastest growing segments in the Indian real estate paradigm.
Pressed by the realities of metropolitan cities such as high urban density, rising pollution levels and a fast-paced lifestyle, premium buyers are now preferring locations which can facilitate eased lifestyle, and are replete with natural landscapes and clean air. Hill locations such as Himachal and Uttarakhand have emerged as leading destinations for second homes amongst the affluent buyers. Moreover, with the emergence of the hybrid work model in the post pandemic era, working professionals are now increasingly preferring second homes which can enable them to work seamlessly while enjoying an environment that prioritises wellness, space, and quality of life.
States like Himachal Pradesh and Uttarakhand have reported a significant rise in the growth of second homes. The data lends conviction to the potential of these locations. For instance, according to Magicbricks' FY25 data, Shimla witnessed a 30.49 per cent year-on-year growth in buyer inquiries while Rishikesh experienced a 30 per cent growth in housing demand.
“There is a clear shift in the mindset of today’s luxury second-home buyer. They are not just investing in property, they are investing in a lifestyle that values well-being, flexibility and long-term value. This shift is driving demand toward mountain destinations such as Himachal Pradesh and Uttarakhand, where low-density, sustainable communities offer both exclusivity and a deeper quality of life. We believe destination-driven living will define the next chapter of India’s luxury real estate market,” says Amar Kapoor, CEO, Terra Grande by Eldeco.
While Himachal Pradesh and Uttarakhand have emerged as the most prominent destinations in this space, the luxury second-home trend is not confined to hill stations alone. Urban wellness destinations on the outskirts of major metros are gaining equally strong traction, offering proximity without the trade-off on environment and lifestyle quality.
"I challenge the very hypothesis of second home here. With multi-dimensional pollution levels in Delhi-NCR reaching alarming proportions, gated luxury farmhouse communities of Naugaon in the lap of Aravali Hills, for instance, are fast emerging as the first home option. Barely a 60-minute drive from Gurugram along the Delhi-Mumbai Expressway and 90 minutes from Delhi and Noida, Naugaon in Alwar district is located at the hotspot of the extended Delhi-NCR map. Fresh air, unadulterated food and water are pre-requisites for physical and mental well-being which are aplenty at Naugaon. The nature-nestled elevated living experience we extend to our patrons at Naugaon, clubbed with the permanence of farmhouse land ownership amid open skies, tree cover and natural landscapes, dismissing concrete and congestion, are a true delight. Common area amenities at Naugaon extend well beyond conventional offerings - Miyawaki forests, meditation decks, mini golf greens, organic farming zones and curated green walkways are curated to create an ambience rooted in wellness," says Vijay Ram Rattan, chairman, Ram Rattan Group.
While many buyers prefer second homes in these locations for retreat purposes, a growing share of buyers is also tapping into the thriving luxury vacation rental market. Properties in hill stations attract high rental yields especially during peak seasons, thus offering a high value proposition in terms of wealth appreciation to end users. Buyers are increasingly approaching these purchases as long-term lifestyle hedges, assets that appreciate over time while delivering experiential returns.
Markets such as Kasauli offer a compelling illustration of this trend. Luxury homes here have witnessed double digit growth rates in terms of prices over the past few years, which shows that investors have been favourably inclined when it comes to these markets.
Catering to the demand, the developers are matching up to the expectations of this segment of buyers. The entry of prominent developers into mountain destinations has led to the emergence of premium residences, managed villa communities, and wellness-integrated developments that bring urban-grade infrastructure and professional management to locations that were previously served only by fragmented residential offerings. This has been particularly significant in attracting NRI buyers, investors and first-time second-home purchasers who prioritise trust and quality assurance alongside the lifestyle proposition. India’s luxury second home market is on a trajectory of unprecedented growth.
As the segment continues to attract interest from HNIs and premium buyers, in addition to improving connectivity of hill destinations, developers who demonstrate operational excellence are set to emerge as market leaders. The growing momentum of luxury second homes segment is indicative of a buyer base that views real estate not purely as an investment, but as a considered expression of how they choose to live.
