According to a study conducted by Kapston.com, a Bangalore-based E-business consulting firm, second-home sales in India increased by 50% from 2002 to 2007. That's slowed a bit in 2008, mostly due to the economic woes of the U.S., says Amar Sodhi, owner of Avatar International, a U.K.-based property brokerage.

But Sodhi also says that secondary property is still in demand. "Now it's a normal, regulated market where good stuff sells very quickly."

For many of these buyers, a second home means a respite from crowded cities, extreme heat and the stresses of work. For others, it's a quick way to generate cash. Sodhi says that some buyers flip contracts before a house is even built, despite the 15% capital gains tax.

Home Is Where The Housing Boom Is
NRIs are different because they don't necessarily buy in resort towns or in big metropolitan areas in order to flip a contract. Many choose to go back to where they came from, says Jaideep Singh, an NRI born in Los Angeles whose father was in the Merchant Navy. Singh is now a sales associate at Seven Seas International, an L.A.-based real estate firm.

"Many NRIs have dreams of having India as a possible place to retire, where hired maid servants will run their day-to-day tasks while they relax close to friends and family," Singh says. "The home towns where they grew up always have a certain draw on their heart strings."

For NRIs who hail from Delhi, the nearby cities of Gurgaon and Noida have proved ideal spots to settle, says Singh. Not only for their proximity to the capital, but also because they're near an international airport.

Today, Gurgaon houses over 1 million residents and is rapidly expanding. The biggest attraction for part-time residents is its abundance of shopping malls. The spot has more malls per square mile than anywhere else in India, which range from luxury emporiums to centers dedicated to home furnishings.

Noida, on the other hand, is known for its IT business. As of late, however, it's been attracting second-home buyers with luxury real estate developments as well as the new 222-acre professional golf course.

For some time, the boom has been focused on the high end of the market. But now, as another 10 million people join the ranks of the middle classes, more affordable housing is popping up, says Sodhi.

And it's not only for Indian dwellers. Non-resident Indians (NRIs) are buying this mid-level housing as well. NRIs can easily attain housing in India because they were born there--but they can also buy even if their parents or grandparents were born there.