What do Shimla, Dehradun, Kodaikanal and Ooty have in common? If your answer is predictably hill stations, then think again. These places are some of the new locales where Indians are looking to invest in residential properties.

And it is not just Priyanka Gandhi Vadra (she made headlines when she bought four bighas in Shimla). There’s a long list of ‘who’s-who’ as well as the well-heeled Indians who are looking at old summer haunts of the British Raj to buy holiday or getaway homes. “Those who already have a home and are earning an annual income of Rs 15 lakh-plus per year are looking at the hill stations to buy holiday homes, and we are looking to tap that segment,” says Vineet Nanda, vice-president, marketing, Omaxe, which plans to set up residential projects in the hills of Goa, Rishikesh and Shimla.

The price advantage in these hill stations, when compared with those in the urban areas, is a major incentive to buyers because this makes it easier on the pocket to purchase larger plots or residential units with a larger floor area. Infrastructure in most of the hill stations has also improved over the years.

“There is good demand for hill station properties, which can be good weekend getaway or a second home. Also, people living in metros find this a cheaper option,” says Anuj Puri, chairman and country head, Jones Lang LaSalle Meghraj.

Real estate prices in Indian hill stations ranges between Rs 5 lakh and Rs 10 lakh for a bigha (which is 1,500 to 6,771 sq metres) and

Rs 1,500 to Rs 2,000 per sq ft and upwards for a residential unit, depending on whether the unit is an apartment or a villa.

“Property prices in major hill stations have gone up 60 to 70 per cent over the past two to three years,” says Amit Bagaria, chairman and chief executive officer of Asipac Projects, a real estate development management company. “A second home or getaway home in the hills is a nascent concept in India at present, compared with Europe. In the UK, for example, nearly 20 per cent of the population have invested in Spain or Portugal. It’s slowly catching up in India.”

While the majority of end users look at residential units, speculators buy land. However, high networth individuals look at both.

The demand is there not just in known hills stations such as Coorg, Ooty, Kodaikanal, Simla or Dehradun. Coonoor, Kamshet, Kumbalgarh, Kausani and Landour are some of the newer hill stations, which have the advantage of being less crowded. Property prices in the lesser-known hills are 2 to 5 per cent lower, depending on the location.

Gold Valley in Lonavla offers 4,500-7,000 sq ft of plot with a constructed bungalow. A three-bedroom house here costs about Rs 75 lakh-1.5 crore. On the other hand, a two-bedroom house in Landour, near Mussoorie, costs about Rs 40 lakh. Disha Direct, a real estate marketing services company, has set up Landmarc Hills at Shirol, Kasara. Perched at an altitude of 1,000 feet above sea level, Shirol is an emerging hill station located off the upcoming four-lane Mumbai-Nashik highway, just two hours drive from Mumbai. Landmarc Hills comprises plots, with areas ranging from 3,000 sq ft to 6,000 sq ft over 70 acres. Plots cost around Rs 225 per sq ft.

“Earlier, a second home was prominently a luxury indulgence restricted to the affluent. Today, this trend has grown in popularity for the same reasons. There is a new segment of buyers who pick up second homes as an investment potential. In addition, high-pressure lifestyle of metros, crowded and polluted cities have fuelled the need for weekend getaways,” says Harindar Bhalla, president, sales and marketing, Sterling Constructions Systems. Sterling has set up Tuscany Terraces at Neral, on the foothill of Matheran, located 80 km from Mumbai. Prices of vacation homes here range from Rs 24 lakh to Rs 62 lakh for studios, one-bedroom and two-bedroom apartments that are 700-1,700 sq ft in area.

Bangalore-based QVC Realty is planning a 150-acre golf community in Chikmagalur, in the foothills of the Western Ghats — a four-hour drive from Bangalore. The community, set around a nine-hole golf course, with sports facilities, gym, resort and entertainment facilities, has natural green forest surrounding it. The residential architecture will be mostly wood and glass to complement the surroundings. Cost of villas will be Rs 1 crore to Rs 3 crore. “Obviously, we procured the property for lower rates. The unit costs are lesser when compared to urban areas, but we offer the same facilities and luxuries of any other such unit in urban areas,” says Prakash Gurbaxani, chief operating officer of QVC Realty.

Another trend that is gaining ground is building a whole “hill station.”

In Lavasa, a 12,500-acre township straddling the Warasgaon Lake is coming up. The Rs 10,000-crore project is touted to be one of its kind. Located at an hour’s drive from Pune and more than three hours away from Mumbai, the hill town will have 500 retirement homes, 40,000 villas and studio apartments. Nearly 10 per cent space will be earmarked for offices.

“We plan to have houses for people belonging to all lower, middle and higher income groups. The rates for houses will begin from Rs 10 lakh for a one-bedroom house to Rs 60 lakh-Rs 1.25 crore for a villa,” says Rajgopal Nogja, president of Lavasa Corp.

Investing in these hill stations, however, is not a walk in the park. There are only a handful of real estate agents who handle such deals. To preserve the ecology of hill stations, some states have numerous bylaws and guidelines that need to be followed. Most northern hill stations have laws that determine the size of the property purchased. Sikkim, Arunachal Pradesh, Nagaland and Mizoram have stringent laws regarding eligibility to buy land. West and south India, on the other hand, have more relaxed norms.

(with inputs from Shilpa Shree)