Villas in Goa Series – Introduction

For decades, owning a villa in Goa has been one of the most desirable lifestyle and real estate investments for Indians from across the length and breadth of the country. 

This demand for villas in Goa was only intensified by the global pandemic, during which owners and renters of Goa’s villa inventory were able to enjoy these unique properties for extended periods of time. During the pandemic, Goa became seen as more than just a vacation destination, but in fact a quasi-suburban region featuring many of the amenities and conveniences of city life.

In our “Goa Villas” series, we dive into the history and present of this unique investment category, in this unique market. 

At Living Luxury Real Estate, we’ve made it a priority to understand the history, nuances, and investment benefits of villas in Goa, because this is a topic that is both close to home, and our hearts. We are residents of Goa (our office is located in Siolim, on the southern banks of the Chapora river).

Our firm’s unique approach combines data analysis, legal and strategic scrutiny, due diligence, property benchmarking, rich visual content creation, and emotive storytelling. We implement this multifaceted approach to protect our clients, while allowing them to experience financial growth, and the magical “wow” moments that come from owning a truly luxurious property.

What is a “lifestyle investment?”

At Living Luxury Real Estate, we define a “lifestyle investment” as an investment that enriches or upgrades an investor’s quality of life.

Over the past 30 years, real estate prices across Indian metros have skyrocketed. These escalating prices in Indian cities, combined with increased population density, air pollution, traffic congestion, noise, and garbage buildup, mean that life in a major Indian city can be both stressful and expensive. Goa, therefore, remains a “lifestyle investment” destination – offering access to natural beauty, sunshine, word-class restaurants, and a growing artistic and cultural community. The owner (or renter) of a property in Goa can expect to enjoy a far more enjoyable lifestyle in Goa than s/he would expect for a comparably-priced property in an Indian city. The only major drawback of life in Goa is that the lack of public transport means that investors and vacationers looking to spend significant time in Goa must either drive their own vehicle or hire a local driver.

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Pictured: One of our favourite places to relax in North Goa – Vaayu Kula at Mandrem Beach.

What makes Goa an attractive real estate investment?

A villa in Goa is an attractive investment for two reasons:
1) Potential for capital appreciation
2) Potential for rental yields

Capital Appreciation in Goa

Capital appreciation refers to the increase in value of a property over time. In other words, it’s the difference between the purchase price of a property and its current (or future) market value. Capital appreciation is an important consideration for real estate investors, as it can provide a significant return on investment.

The rate per built-up square foot for luxury Goa villas range from ₹9,000 per Sq Ft for villas in South Goa constructed in the early 2000s to ₹30,000 for brand-new, unique ultra-luxury independent villas in North Goa.

Furthermore, the following factors make us bullish on capital appreciation opportunities for villas in Goa:

• Year-round tourism: Goa is a national and international tourist destination, and the property market is closely tied to the tourism industry. An increase in tourism can drive up demand for property, leading to an increase in property values.
• Limited supply: the strict environmental zoning laws in Goa mean that there is limited land zoned for development.
• Increased demand from economic growth: An improving economy in Goa, and an increase in the number of people moving to Goa for work can also lead to an increase in demand for property, which can drive up property values. Furthermore, economic growth across India will create more demand for holiday villas in Goa (India’s most unique luxury real estate market).
• Uniqueness and intrinsic value: Properties with intrinsic, immutable assets – such as privacy, 
• Infrastructure investment: increased investment in highway infrastructure, and the new Mopa airport in North Goa, mean that Goa is growing more internally connected, as well as more accessible to the rest of India and the world.

Independent villa in Benaulim, South Goa. 500m from Benaulim Beach. Exclusively listed by Living Luxury Real Estate. For more details, Whatsapp us at 9028381174

Rental Yields in Goa

Rental yield is a measure of the return on investment (ROI) generated by a rental property. It is typically expressed as a percentage of the property’s value or purchase price and is calculated by taking the annual rental income and dividing it by the property’s value or purchase price.

For example, if a property is valued at ₹3 Crores, and the annual rent is ₹24 lakhs, the rental yield would be: ₹24,00,000 / ₹3,00,00.000 = 8%

Rental yield is a particularly useful metric as it allows real estate investors to benchmark their investment against other investments (including financial investments) – for example, a stock yield. A property that is yielding a steady (or at least relatively predictable) cashflow is a wonderful asset for any investor, as it can offset the maintenance costs of owning a property (especially in a market such as Goa, where the intense monsoon rains must be managed to prevent paint damage or fungal growth on walls or within interior spaces).

Goa’s unique status as a tourist destination – previously only in the dry months, from October to April, but now year-round – make it an attractive market for investors. International tourists typically visit Goa in the dry months, and especially during winter in the Northern hemisphere. Indian tourists, however, visit Goa year-round, and some of India’s best restaurants and cafes now remain open through the monsoon season.

Because of this year-round demand, the rental yield for properties in Goa (and especially North Goa) is comparatively higher than an Indian city.

Rental yields in Indian cities typically range from 2.4% to 4%.

Rental yields for luxury villas in Goa, on the other hand, can range from 5-10%, depending on the amenities, views, distinctiveness, and location of the property. At Living Luxury Real Estate, we provide a detailed SWOT analysis of every property that we showcase to clients, as well as rental yield projections that are based on reasonable future scenarios.

Conclusion

In conclusion, owning a villa in Goa can offer a wide range of lifestyle and real estate investment benefits, from providing a solid capital appreciation opportunity to an income-generating vacation home. The sense of privacy, space and community, as well as the ability to personalize the space make owning a villa in Goa an ideal choice for both a vacation home or as an investment property. With the growing demand for holiday homes in the state, owning a villa in Goa can be a financially wise and emotionally fulfilling decision.

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Last modified: September 29, 2023