Union Budget's measures may spark real estate boom in top tourist destinations

“Lifestyle destinations like Goa, Nainital, and Dehradun are already seeing strong buyer interest, as investors seek second homes that can double as income-generating assets, further fuelling real estate expansion in these high-demand locations," he told Moneycontrol.

Real estate demand in tourism hubs

Market data suggests a significant rise in residential demand across markets in key tourism and pilgrimage hubs such as Goa, Nainital, Ayodhya, Prayagraj, Rishikesh and Varanasi, among others.

According to data from Magicbricks, residential demand across lifestyle destinations—such as hill stations, beach cities, and spiritual tourism hubs—has already surged, as homebuyers seek tranquil alternatives to crowded urban centres for holiday homes and long-term investments.

The data showed notable year-on-year growth in residential searches, with Nainital witnessing a 49.3 percent increase, Dehradun 27.7 percent, Shimla 33.7 percent and Rishikesh 26.6 percent. The trend extends to spiritual hubs like Prayagraj (28 percent YoY increase), Varanasi (11.8 percent), Puri (15.3 percent), and Shirdi (10.6 percent), where increasing buyer interest is fuelled by affordability and tourism-driven investment potential.

With residential prices remaining competitive—Varanasi at Rs 6,200 per square foot (psf), Puri at Rs 6,629 psf, and Shirdi at Rs 4,598 psf—these markets present attractive opportunities for investors looking to capitalise on the growing demand for holiday homes, homestays and short-term rentals (BnBs).

Market observers also said that land prices in these regions are likely to appreciate due to increased investment and demand. Speculative buying may drive up prices further, particularly in high-potential areas.

Experts see diverse investment opportunities that contribute to economic development and the preservation of heritage sites, they said.

Unlocking real estate opportunities

Recognising tourism as a driver of employment-led growth, Union Finance Minister Nirmala Sitharaman has announced a Rs 20,000 crore initiative to enhance infrastructure and connectivity in India’s top tourist destinations.

Kunal Behrani, Chief Operating Officer, Unity Group, said that growing employment opportunities in the tourism sector will increase housing demand.

“Overall enhancement of commercial and tourist activities would further fuel the overall job market in these areas thus creating more demand for residential units. Additionally, enhanced connectivity will encourage the establishment of co-working and co-living spaces in scenic areas,” he said.

Amrita Gupta, Director of Manglam Group and Founder President of CREDAI Rajasthan Women’s Wing, concurred, saying that the development of 50 top tourist destinations will unlock vast opportunities in hospitality, retail, and urban infrastructure, reinforcing tourism as a key economic driver.

Push for homestays, hotels

Experts said that improved connectivity and incentives for homestay under MUDRA loans will encourage property owners to convert homes into short-term rentals, boosting rental yields. Additionally, demand for vacation homes, second residences and homestays is expected to rise.

Behrani of Unity Group added that improved infrastructure and easier financing for hotels will accelerate tourism-related developments, increasing demand for hospitality, retail, and food & beverage spaces.

Aditya Kushwaha, CEO and Director, Axis Ecorp, said the government’s push for the tourism sector will create new demand for luxury hotels, branded residences, homestays and premium retail hubs, reinforcing tourism as a key economic driver.

“Enhanced foreign investment policies and expanded NRI participation will further unlock capital inflows, strengthening India’s position as a premium real estate destination. With infrastructure-led growth and regulatory ease, the sector is set for sustained expansion," he said.