Financial crisis: Kerala real estate prices likely to go down

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.