From Tourists to Homeowners: How Goa Is Becoming India's Coastal Living Capital

Sheeshram Yadav, Managing Director of Yugen Infra highlights how the real estate market in Goa has evolved as a seasonal hotspot in the past decade and the factors increasing in homebuyers’ interest.  Sheeshram comes with a rich experience of around two decades in financial services and the real estate sector.

Goa has been recognized globally as a leading tourist destination for decades with millions of domestic and international visitors every year keen to enjoy the sun-soaked beaches, laid-back lifestyles, and unique cultures. However, in the last few years, Goa has started to develop as a real estate-driven landscape with both national and international buyers now looking to make Goa their second home or investment property.

With increasing rental returns, limited land options, and a multi-faceted broader market, trends for Goa's real estate are changing rapidly into a desired location for both homebuyers and investors.

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Goa: Globally Recognized Tourism Powerhouse and Residential Real Estate Hotspot

Goa represents one of the unique situations in Indian real estate as it presents itself as a growing tourism destination as well as an up-and-coming real estate market. Goa's global tourism offer attracts over one crore tourists a year making it one of the most visited destinations in India. Coupling high tourist numbers to the state's limited land bank creates a market with higher rentals and increased value appreciation.

The two main reasons for selecting Goa as a real estate market are twofold. First, the market is situated in a global tourism location while attracting visitors, both international and domestic, throughout the year. Second, with very little land available, Goa’s residential real estate market is one of the highest rental yield markets, producing yields of 6-8 percent, which is uncommon in the Indian real estate market where the average return is only 2-3 percent.

With a constant demand in Goa’s real estate market, the demand will slowly stay the same in the years to come. It is quite difficult to get land for more development, which means prices will keep increasing and this is a market that will give good returns to its investors in the long term. As land developers increase the number of quality developments, the market in Goa is still very attractive for both residential buyers as well as rental income investors.

Evolution of Goa Real Estate Market

In the last decade, the real estate market in Goa has changed considerably. A few factors have impacted the subject. One of the most important factors is the increase in interest from homebuyers, in spite of the overall volatility of the markets. There is significant demand for second homes or holiday homes now that the pandemic has changed the way we see second homes. Certainly, more buyers are looking for properties with great living space, proximity to nature, and potential for work from home or remote work.

The Goa real estate market is also not without its challenges. The limited amount of available land and the long time taken to approve due to the legal framework from Portuguese colonial legal systems have slowed the field of land law. But developers are persevering to achieve development solutions to offer housing to meet the evolving appetites of consumers in Goa. The low-density potential of low-rise communities in comparison to denser developments has attracted more consumer interest in real estate placements; particularly those that have sought modern builds and community appeal.

While the land scarcity is a reality in Goa, it is also an opportunity for buyers and investors to get in quickly. Strong growth in the real estate market will likely continue, and with developers moving toward quality rather than volume and full-service hospitality experiences, Goa's real estate community will remain vibrant, interesting, and viable for years to come.

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Environmental Factors in Goa's Real Estate Development

The natural beauty of Goa with its expansive beaches, lush greenery, and hillsides has always been a drawcard. So, it makes sense that environmental conservation has become an important factor in modern real estate developments in Goa. Goa is unique in that especially its stable climate, which is constant throughout the year, with the low air pollution anywhere in India, constant sea breezes, and the perfect overall temperature for coastal living.

As the region evolves, it’s important to develop real estate projects that integrate and support nature. Today, more developers realize that sustainability is important, and more projects contain sustainable components such as green features, bio waste management, and green areas to enhance living in the area. Such eco-friendly developments are particularly important now as Goa transforms from a seasonal tourist destination to an all-year tourist destination.

Integrating greenery, hills, and beaches into modern living is increasingly popular, and it replicates a peaceful, idyllic lifestyle that doesn’t exist in urban living. For homeowners and investors looking for properties in Goa, developers want to reflect the natural beauty of the landscape and improve living by adding modern living without eliminating the environmental charm of the nature we are fortunate to function and live.

Integration of Coastal Living and Cultural Heritage in Goa

Goa's cultural heritage is another reason the area is attracting both tourists and prospective homeowners. Goa is known for its Portuguese influence and cultural heritage which includes beautiful churches, temples, and colonial structures. In addition to the cultural heritage, Goan food, or more recently, seafood also draws visitors and residents.

For the region to retain its charm and be viable for the contemporary market, it is important to integrate Goa's cultural heritage into new coastal living developments. Developers will routinely show Goan culture and history and draw from Goan architecture and rich social culture with communal or gathering spaces. Many of the new coastal living developments will include space for local art and cultural events, so the homeowner finds a true Goan experience along with modern living.

This becomes modern living with a deep sense of place for future homeowners, as it is important for people looking for a second home or residence duration in Goa.

Home Buying Opportunities in Goa

Highest Rental Return: Current rental returns for the residential property in Goa range from 6 percent-8 percent rental return, which is considerably more than that of some of India’s metro cities. Goa has provided a favorable market, especially for investors whose main objective is income-generating properties.

Low-Density Development: There is a growing desire for lower-density, community living developments. Consider purchasing property that provides quality living, in a peaceful, low-density environment.

Long Term Appreciation: The appreciation of residential property prices is an expectation, as demand for holiday homes increases, and demand for permanent residences increases. Expect appreciation to be steady over the next (15-20) years.

Challenges in Real Estate Development of Goa

While the prospects for the Goan real estate market are positive, there are several challenges for developers in the region. These challenges include land acquisition issues, regulatory complexities, due to seasonal rains, and a lack of a master plan for the state which offers an obstacle for urban planning and development.

Developers are flocking to Goa from large cities such as Delhi, Mumbai, Bangalore, and Hyderabad, bringing many millions of investment with them. Even with these challenges, the increased demand for coastal living and resort-style homes has positioned Goa as a valuable asset in the Indian real estate market.

Outlook for Goa’s Real Estate Market

Ultimately, we believe the Goan real estate market will continue to thrive. The combination of natural beauty, rich cultural heritage, and high rental yields is likely to appeal to buyers and investors for a long time. Goa's relatively small land base for further development also provides a significant advantage for those seeking property in Goa as a long-term investment. As Goa continues to evolve into a year-round destination, there will be increased (and continued) demand for quality and sustainable real estate.

Investors and home buyers would be wise to enter the market quickly, before interest rates increase and blight Goa's burgeoning future by cooling demand. With emerging high-quality developments coming into the market, along with impressive environmentally conscious projects, Goa appears to be the ideal location to embrace a new lifestyle of coastal living with modern-day luxuries.