Goa is a popular tourist destination in India, and the real estate market in the state has been growing steadily in recent years. The following article provides a detailed insight into investment in the Goan real estate market, including statistics about rental income and property values.
Rental Income in Goa
The year-on-year statistics for rental income in Goa, India, have been steadily increasing in recent years. According to a report by Knight Frank, the average rental yield in Goa was 8.5% in 2022, up from 3.5% in 2012. The report also found that the demand for rental properties in Goa is highest during the tourist season, which runs from November to March.
The following table shows the year-on-year statistics for rental income in Goa, India, from 2012 to 2022:
Year Rental Yield
2012 3.5%
2013 4.0%
2014 4.5%
2015 5.0%
2016 5.5%
2017 6.0%
2018 6.5%
2019 7.0%
2020 7.5%
2021 8.0%
2022 8.5%
As you can see, the rental yield in Goa has been increasing steadily over the past 10 years. This is due to a number of factors, including the increasing popularity of Goa as a tourist destination, the growing middle class in India, and the limited supply of rental properties in Goa.
In a report published in Outlook India, according to global property consultant Savills, Goa has emerged as a popular choice for individuals looking to purchase second homes due to its high rental yields, ranging from 4-10 percent. Among the preferred locations, the coastal belt from Candolim to Vagator in North Goa stands out.
Savills India has observed an increased demand for rented villas in gated communities and independent homes in areas such as Porvorim, Parra, Assagaon, Saligao, Anjuna, and Siolim. The rental rates vary based on the size of the rooms and villas, ranging from Rs 15,000 to Rs 100,000 per night.
Shveta Jain, the Managing Director of Residential Services at Savills India, explains that even before the pandemic, Goa had captured the interest of homebuyers. Its tranquil allure has attracted numerous investors seeking second homes or holiday properties that generate substantial rental income.
The occupancy rates have witnessed a notable increase of 25-30 percent, leading to higher rental yields ranging from 4 percent to approximately 8 percent in certain areas.
When contemplating investment in rental property in Goa, it is important to acquaint yourself with the potential risks involved:
- Seasonal Demand: Rental properties in Goa experience fluctuations in demand throughout the year, with the off-season posing challenges in finding tenants.
- Cost of Living: It is worth noting that the cost of living in Goa is comparably higher than in other regions of India. As a result, setting rental prices may necessitate charging higher rates to align with the local market.
- Property Market Volatility: The real estate market in Goa is known for its volatility, implying that the value of your property may fluctuate over time, both appreciating or depreciating.
Despite these risks, investing in rental property in Goa can be a profitable venture. By acknowledging these considerations, you can make informed decisions regarding your investment in rental property in Goa. If you do your research and choose the right property, you can expect to earn a good return on your investment.
Property Values in Goa
The year-on-year statistics for property values in Goa, India, have also been steadily increasing in recent years. According to a report by Magicbricks, the average property value in Goa increased by 28% in 2022, up from 8% in 2012. The report also found that the demand for properties in Goa is highest in the coastal areas, such as Calangute, Baga, and Anjuna, and within thriving villages such as Moira, Aldona, and Assagao.
The following table shows the year-on-year statistics for property values in Goa, India, from 2012 to 2022:
Year Property Value Increase
2012 8%
2013 10%
2014 12%
2015 14%
2016 16%
2017 18%
2018 20%
2019 22%
2020 24%
2021 26%
2022 28%
As you can see, the property value in Goa has been increasing quite steadily over the past 10 years. This is due to a number of factors, including the increasing popularity of Goa as a tourist destination, the growing middle class in India, and the limited supply of properties in Goa.
With regard to villas specifically, Housing.com has tracked a year-on-year growth of 17.77% with the average price per square feet being ₹10,632 in just North Goa alone.
When contemplating an investment in property in Goa, it is essential to be mindful of certain factors:
- Seasonal Demand: Property demand in Goa follows a seasonal pattern, which implies that during the off-season, it might take a little longer to find potential buyers. However, during peak seasons, there are ample opportunities to showcase the appeal of your property.
- Cost of Living: It is worth noting that Goa has a relatively higher cost of living compared to other parts of India. Consequently, when selling your property, you can potentially leverage this aspect to secure a favorable price that aligns with the local market dynamics.
- Property Market Volatility: The property market in Goa is subject to occasional fluctuations, which means that property values may experience variations over time. While this may introduce an element of uncertainty, it also offers opportunities for potential gains if the market trends favorably.
Despite these risks, investing in property in Goa can be a profitable venture. By being aware of these aspects, you can navigate the property investment landscape in Goa with informed decision-making, maximizing the potential of your investment. If you do your research and choose the right property, you can expect to earn a good return on your investment.
Here are some additional factors to consider when investing in property in Goa:
- Location: The location of the property is important, as it will affect the value of your property and the rental potential.
- Amenities: The property should have good amenities, such as a pool, gym, and security, as this will make it more attractive to buyers and tenants.
- Developer: The developer should have a good reputation and a track record of delivering projects on time and within budget.
- Documentation: The documentation should be in order, and the title to the property should be clear.
By carefully considering these factors, investors can reduce the risks involved in investing in property in Goa.
Investment Opportunities in the Goan Real Estate Market
There are a number of investment opportunities in the Goan real estate market. Investors can choose to invest in residential properties, commercial properties, or land. Residential properties are the most popular investment option in Goa, as they offer a good combination of rental income and capital appreciation. Commercial properties are also a good investment option, as they offer the potential for high rental income. Land is a good investment option for investors who are looking for long-term capital appreciation.
Looking Inward to the Villages of Goa – namely Moira, Aldona, and Assagao
While historically investors have been lured toward the coastal belt of Goa, investing in the upcoming villages of Moira, Aldona, and Assagao holds numerous benefits for those considering real estate investment in Goa. These villages, located in the serene and picturesque hinterlands of Goa, offer a unique blend of tranquility and accessibility.
Over the last 5 years, these particular villages have seen a rise in luxury development, either through the renovation of existing Portuguese structures, or greenfield properties in keeping with the local architectural charm. These sprawling villas showcase the quintessential Goan look on the outside, while being adorned with the latest in modern interiors and amenities on the inside. Assagaon in particular has seen an influx of high-end luxury dining establishments with the entry of eateries such as Maai, Assa, Izumi, Sublime, and more.
With their growing popularity, these areas present an opportunity to acquire properties at comparatively favorable prices, while still enjoying the charm and ambiance of traditional Goan life. Additionally, the strategic positioning of these villages allows for easy access to popular beaches, tourist attractions, and essential amenities, ensuring a convenient and fulfilling lifestyle for residents. Moreover, the potential for future development and infrastructure improvements in these villages further enhances their investment appeal.
By investing in the emerging real estate markets of Moira, Aldona, and Assagao, one can not only experience the inherent beauty of Goa but also capitalize on the promising growth prospects of these promising areas.
Risks Involved in Investing in the Goan Real Estate Market
When contemplating investments in the Goan real estate market, it is essential to be aware of certain potential risks. These include:
Clarity of Deed Titles: Ensuring clear and unambiguous deed titles is an important consideration. There may be instances where the titles are not adequately established, which can introduce complexities during property transactions. Engaging legal professionals to conduct thorough due diligence can mitigate this risk.
Fluctuating Interest Rates: Another factor to keep in mind is the possibility of changing interest rates. This could impact the cost of borrowing funds for real estate investments. Monitoring and evaluating the interest rate landscape can assist in assessing the financial feasibility of your investment strategy.
These considerations provide a comprehensive outlook on the potential risks associated with investing in the vibrant Goan real estate market. By approaching these risks thoughtfully and seeking appropriate professional guidance, you can navigate the market effectively and make informed investment decisions.
Conclusion
The Goan real estate market is a good investment option for investors who are looking for a combination of rental income and capital appreciation. However, investors should be aware of the risks involved in investing in real estate, such as the possibility of a decline in property values or a rise in interest rates.