Apartment sales halve in Kerala

Apartment sales in Kerala have more than halved and launch of new projects almost come to a standstill ever since the Supreme Court ordered demolition of apartment complexes in Kochi for violating Coastal Regulation Zone norms. Real estate sector anticipates that the demolition will have a far-reaching impact on the investor interest in apartment projects.

The Supreme Court in September had ordered demolition of four apartment complexes at Maradu in Kochi. Industry finds that after the SC verdict real estate projects in the state have taken a major hit.

“The sales of apartment units have dropped by more than 50 per cent after the incident in Kochi, which is the largest market in Kerala. Other markets like Thiruvananthapuram, Kozhikode, Thrissur and Palakkad too have seen a decline of more than 30 per cent,” said S. N. Raghuchandran, Former Chairman of Credai Kerala and Managing Director of SI Property Kerala.

“Prospective buyers now find Kerala’s property market ridden with uncertainties. The turn of events has led to a trust deficit among buyers and has started affecting the cash flow of developers,” he said.

According to him, enquiries have almost stopped and new project launches have become negligible. This has affected the prices as well. Real estate prices have been on a downward slide for in the past few years after job losses started happening in the Gulf region.

“Apartment prices have almost halved from what it was five years back. Nonresident Indian investors used to play a major role in the demand for real estate property in Kerala. Since the job losses started happening in the Gulf region, the prices have corrected by around 30 per cent,’ he said.

Till 1997, NRIs used to account for up to 80 per cent of the sales in Kerala. This started coming down in recent years and has touched down to 30 - 40 per cent.

The real estate sector does not expect things to improve in the near or medium term. ‘Until the government takes up serious measures to rebuild confidence among the buyers, the market may not see a revival. The revised building rules have further added to the confusion. We do not expect things to get better in near future,” said Raghuchandran.