Kerala property bubble busted. The artificial inflation of the property in Kerala has taken a dip. During the artificial inflation period the property was sold on price felt by the seller without any relation to the investment vs returns.

Think carefully before investing in Kerala during this Artificial inflation period as the prices are falling drastically. The best way is analysis the place you are going to invest in Kerala and check what happened in this place in the last 20-30 years in terms of development (new buildings, town development, road infrastructure development, entertainments, schools and hospitals) . You will be shocked that nothing much changed in many places in Kerala unlike other states in India

Also remember to check if you can sell the property once purchased in Kerala as the market trend is when you buy it costs a fortune but when you try to sell it there is no buyers in the market to buy it

Some of the key artificial inflation factors where;

1. Airport : Plot near Airport, how many of these investors actually use these Airports. In major countries people move away from the Airport for residential due to noise and security. This was used efficiently as a method to sell property in Kerala. The commercial property in this area makes business sense.

2. Colleges: The major privatization of the higher education has made a large impact on the price of property value which again was artificially introduced by the sellers. The residential investors might have 1-2 kid but why do you need to be so close to the colleges if the infrastructure to reach it is good.

3. The roads: In kerala the major drawback is people don't like to give land for road development but if someone develops a small single line road near the land the property price goes up by 10-20 times. This again is purely artificial inflation method used in Kerala.

Trivandrum Rising - Our city tomorrow and how we can help it develop.: No More National Highways for Kerala!
Reducing national highway width: State hopeful of positive response - The New Indian Express
NHAI may

4. Riverside property: The sale of 5-10 cents near the river in many cases ended up not usable due to building regulations from the council. Again this was used so well during this period to inflate the price

5. The modern age of cars have never been factored into the kerala housing development. If you are staying in a residential house normally in the modern day of both people working there will be 2 cars and no residential houses/flats have parking for 2 vehicle. If you are lucky you will find one parking but to get your car into the parking area you will have to go through such a narrow path that it is unbelievable and if you manage to go through it then reversing or taking a turn is impossible.

The widths of vehicle lanes typically vary from 9 feet (2.7 m) to 15 feet (4.6 m) so please check if there is path for 2 vehicle before purchasing any property in Kerala, again you will be shocked that it is not there.

The other major problem in Kerala:

The politician and local business people do not like to see transport infrastructure development due to the impact it has on their personal interest. As an example if there is proper 4 line fast roads in Kerala, the people are not restricted to staying inside the City and they will be able to move in and out of the area of residential lets say 30-40 Km radius away from Kochin in 20-30 minutes which has heavy loss for the local business people and politicians who are trying control this market because people will drive to the nearest city to do their purchases. Look at the other states, they build Golden roads, this did not happen in India due to politicians and people working against it to protect their interests.
Read more
2 Replies
Sort by :Filter by :
  • Great article man. Most of the project here in Kochi is over priced. and In Kakkanad, there is over supply. I do not know where these going to heading onto.
  • There is a price cycle in real estate. Prices are stuck or down since last 5 yrs in Kerala. As long as land size does not increase with purchase power of NRIs or locals prices tend to go up slowly. Wait for another 5 yrs and one can see prices double up