Financial crisis: Kerala real estate prices likely to go down
November 23, 2008
kerala real estate will find prices correcting
Last night, I had a crisis call from a real estate agent based in Kerala. It was not a regular call to an NRI inducing him to invest in a property, but rather a distress call to resell an existing house plot. He told me that this is the right time to buy as he thinks apartments and land plots are coming under great resale stress and prices are falling down in Kerala. Like anywhere else in the world, Kerala real estate is feeling the market pressures of limited liquidity. 3-4 years back, the rising land prices made it impossible for any resident Indian to purchase property in Ernakulum, Kakkanad, Trivandrum, Alleppey or any other place where real estate was booming. And then the money hungry banks and property agents turned to gulf residents and other NRI Indians, making the land prices to skyrocket. The nonresident Indians took loans from banks in their residing countries and stuffed these greedy speculators. This business model was very successful, until now. Today NRIs find it hard to raise cash sources to pay their installments. Very soon huge payment defaults will occur as they find it very hard to even sustain their normal life in their respective residing countries. Inflated prices will face the harsh market realities and tumble down; in the process hurting many speculators.
December 14, 2008 at 5:12 am
very good writing…as expected. do you still read?
December 14, 2008 at 6:36 pm
Sreeniiiiiiiiiii, how are you? Its been a long time since we met. Updateeeeeeee
January 4, 2009 at 12:40 pm
Any update on the above pls. I have some investment proposals and is it right to invest now or do you think the market will fall drastically in the coming months?
January 5, 2009 at 2:17 am
Dear Unni,
I am not a real estate expert. But I am an end user or a potential client of these realtors, which helps me write about land with out any prejudice. Seven years back when you travel through MG road Ernakulam, all the big hoardings were that of jewelleries. Only they could afford to spend this much amount in promotion as only gold provided this much return. But then the real estate started to boom. At that time, anyone who is living in Kerala had only two dreams, to send his/her daughter/son to nursing and to buy some property as an investment. (By then the multilevel marketing fad was almost over!).
Majority of the money which is flowing into the land in Kerala is from USA and GCC. Northern districts have great support form gulf countries and south east has from GCC and USA. It was easy to get credit in these countries till very recently and now their banks have dried up.
Kerala realtors are marketing very much in gulf these days as they cannot find anyone purchasing from them back home. They push this idea that it is the best time to buy as nobody is buying now and we will get a great deal. Real estate agents are giving more and more freebies, which I see only as an indication for the best things to come.
It will take at least 3 more months to see the impact of payment defaults and distress sell to avalanche. It has already started happening and moving forward. If you can wait till then, I think it will be more favorable. But it is only my personal opinion.
NB: if you Google it, then you can see that the money transfers from GCC has come down very much. This will affect our liquidity very soon.
May 12, 2009 at 2:55 am
did it went down enough now?
August 31, 2009 at 9:03 am
Hi, just came here to read about copy writing and couldnt help but notice the post about kerala real estate. Not that i have anything to do with kerala, other than my wild fantasy to buy a house amidst the dense greenery (reminds me of Macondo and the dense foliage that Latin american countries sprout)and some good ole fashioned discussion on literature, marxism, John Abraham etc. I travelled once to trivandrum and noticed how throughly beautiful those houses were, intact in their own yesteryear style replete with an old man in the easy chair reading the newpapers wearing just his veshti. But now you tell me this:
1. the prices have gone up and we cant buy those small quaint houses
or
2. Well all soon run out of maoney thanks to the situation that we can never dream of the said houses anywhich ways.