Goa real estate market: Young professionals are now investing in villa properties due to attractive rental yields

Young professionals find it attractive to invest in gated villas in Goa because the segment offers attractive rental yields and capital appreciation. While the return on rentals is anything between 5-8% approximately, Grade A locations such as Anjum, Arpora, Baga, Calangute, Candolim have witnessed a 22% capital appreciation in villa prices in the FY 2024-2023. 

The data shared by Savills India Research showed that the prices of some of the new villa properties in Goa compare with apartments in South Mumbai and South Delhi that are priced between ₹7-10 crore.

Younger professionals, especially from major cities like Mumbai, Delhi and Bengaluru and other prominent cities, are now moving to Goa. These new residents often work in creative fields or are digital nomads seeking a better work-life balance, the data showed.

Also Read: Goa remains the top choice for rich Indians to invest in vacation homes

Savills India's research indicates that buyers are primarily individuals aged 30-60, including both salaried professionals and businessmen. These buyers are attracted by rental returns and capital appreciation, achieving gross yields of 10-12% per annum for wealth diversification.

With the advent of asset management firms and hospitality operators managing individual homes, buyers for second homes are not only end buyers but retail investors seeking both rental returns and capital appreciation, it showed.

Savills India has witnessed a trend where individuals are choosing gated villas along the coastal belt, with sizes ranging from 2,000 to 4,000 sq. ft. for 3-4 bedroom units. Plot sizes for these gated villa projects vary from 190 to 400 sq m, data shared by Savills India Research showed.

Villa sizes shrink due to rising land prices

The supply of villas in Goa has shifted, with the standard size decreasing from 500 sq meters to 250 sq meters over the past five years due to rising land prices, the data showed. 

Premium views remain desirable but scarce, and investment motives now often outweigh end-use objectives. While beach proximity is still preferred, locations like Assagaon and Siolim attract lifestyle-conscious buyers who prioritize address and quality over beach access, the data showed.

The average home size in prominent locations has fallen to 300 sq meters, while emerging areas still offer larger properties. There are two main buyer categories: investor-aspirational and end-user, including professionals, industrialists and those seeking capital gains deployment, the data showed.

Vacation rentals in popular micro markets yield high rental income, providing competitive ROI and steady income for investors. Demand for private villas, favored by families and groups, is rising, it said.

Here’s how capital values for villas stack up in Goa

Grade A locations such as Anjum, Arpora, Baga, Calangute, Candolim, Vagator, Morjim, Assagao, Siolim, Mapusa, Pilerne, Reis Margos, Caranzalem, Dona Paula have witnessed a 22% change in villa prices in the FY 2024-2023. The average capital rates were around ₹25,504 per sq ft in Q2 2024 and ₹20,914 per sq ft in Q2 2023. They were at ₹15,667 per sq ft in Q2 2022.

Grade B locations such as Aldona, Moira, Nachoinola, Panjim, Chapora, Nerul, Mandrem, Parra, Saligao, Verla Canca, Saipem, Guirim, Tivim, Bicholim, Penha de Franca, Sangolda and Bambolim have witnessed a 30% change in prices in the 2024-2023 period. The rates prevailing in Q2 2024 were around ₹22,410 per sq ft and ₹17286 per sq ft in Q2 2023. The rates for villa properties in Q2 2022 were at ₹14,564 per sq ft.

Also Read: Why are rich Indians scooping up luxury homes?

“As part of Goa Home Fest 3.0, we are offering a platform for sellers to showcase their best homes and for buyers to search for homes based on their requirements. It includes ready-to-move-in and under-construction homes in Goa, covering both premium coastal locations like Anjuna, Vagator, Candolim and quieter ones like Nachinola, Moira and others in North Goa. The showcase also features independent bungalows and Portuguese homes, which highlight the history and culture of Goa,” said Shveta Jain, MD, Residential Services, Savills India.

Interest in commercial real estate

As Goa continues to grow and attract tourists, its commercial property market has also been on the rise, the data showed.