Is property appreciation in Kerala - A myth or a reality?

We have heard of news and read articles about property appreciation in Kerala in the last decade. The forecasted appreciation for real estate is about 20 to 30% CAGR in the next ten years or so. Courtesy Skyline builders, we now have some real statistics to show in terms of property appreciation in Kerala. Skyline is a reputed builder with a good history of completing projects on time. You can read about all their project appreciations here: Skyline appreciation chart

Our key takeaways from this data:

1. You should not look at the % values of appreciation in itself because they would draw a wrong picture. % values would depend on project location, new developments in the area, demand supply mismatch in terms of real estate buying etc.

2. On an average projects which are 5 years old in Kochi have seen a price increase of 2.5X i.e a CAGR of about 20% annually. CAGR is the cumulative average of the annual growth rates.

3. On an average projects which are 10 years old in Kochi have seen a price increase of about 4X i.e. a CAGR of 14% annually. Some projects like Crystal waters show a 10X growth or a CAGR of 25% annually.

4. On an average projects which are 20 years old in Kochi have seen a price increase of 7.5 to 8X i.e a CAGR of 11% annually.

As you would see in Skyline's data the same may not apply to cities like Kozhikode or Kannur. The projection we could derive from this for investors looking to exit properties in a period of about 6 years is that they could estimate about a 20% annual growth in Kochi or Trivandrum. If you can stay invested for a decade you would get about 14% annual returns which is twice as much as you can get from government bonds or PPFs.To put this into perspective a 30 lac property will fetch you 1 crore 11 Lacs with a 14% return in 10 years and a 30 Lac property will fetch you about 90 lacs in a period of 6 years with a 20% growth rate. 

Also to keep in mind is the fact choice of property is crucial : a good choice could may make a difference in value of 2X over a period of 10 years. For more on choosing you property you can approach our experts via www.nandanamconsultants.in

Skyline Projects in Kochi

Appreciation Table

SI. No.	Name of the Project	Year	Sold Price/Sq.Ft*	Current Price/Sq.Ft*	% of Appreciation	Current Rental Value
1	Mansion	1989	375	3000	800%	5,500
2	Habitat	1990		4500		15,000
3	Springfield	1991	400	4200	1050%	12,000
4	Belair	1992	650	3800	585%	10,000
5	Green Valley	1992	1250	9000	720%	16,000
6	Marble Arch	1993	650	3200	492%	7,500
7	Queens Park	1993	615	9000	1463%	7,500
8	City Park - Oakwood	1994	950	3800	400%	11,000
9	Crystal Waters I	1994	950	9000	947%	8,500
10	Green Woods	1995	1350	10000	741%	18,000
11	Triton	1996	1100	7000	636%	25,000
12	City Park -Silver Oak	1996	950	3900	411%	11,000
13	Autumn Woods	1998	1450	12000	828%	20,000
14	Daffodils	1999	925	3000	324%	5,000
15	Green Valley	1992	1250	3700	828%	20,000
16	City Park -Pinewood	2000	950	3900	411%	11,000
17	Crystal Waters II	2000	950	9000	947%	8,500
18	Rosemount Homes	2000	1325	4200	317%	7,000
19	Ebony Woods	2002	1425	8800	618%	16,000
20	Emerald	2002	1450	4500	310%	13000
21	Tulip	2002	1050	3200	305%	6,000
22	Elysium Gardens	2002	1495	12000	803%	20,000
23	Marigold	2003	1070	3200	299%	6,000
24	Gateway	2003	1050	4000	381%	7,000
25	Solitaire	2003	1250	4550	364%	11,000
26	Florento	2004	1190	3200	269%	7,000
27	Homestead	2004	1490	6500	436%	16,000
28	Amity Park	2004	1390	4200	302%	16,000
29	Platinum	2004	1750	5000	286%	18,000
30	Orion Villas	2004	1650	12000	727%	25,000
31	Zircon	2005	1450	4000	276%	14,000
32	Opal Arch	2005	1450	3800	262%	12,500
33	Royale	2005	1890	4500	238%	20,000
34	Aster	2005	1325	3500	264%	10,000
35	Legacy	2005	1650	4200	255%	15,000
36	Melrose	2005	1450	3800	262%	10,000
37	Primrose	2005	1490	3400	228%	9,000
38	Orion I	2005	1450	4500	310%	13,000
39	Templeton	2005	1750	4200	240%	14,000
40	Topaz	2005	1675	5500	328%	20,000
41	Orion II	2005	1600	4500	281%	13,000
42	Riverscape	2006	2170	3300	152%	12,500
43	Palmshade	2006	1600	4500	281%	16,000
44	Lavender	2007	2250	3600	160%	11,000
45	Eminence	2011	3500	4250	121%	15,000
46	Imperial Garden	2011	4200	5000	119%	20,000
* Sold Price, Revised Price and Current Market Price are per sq.ft.

Skyline in Trivandrum: 

Appreciation Table

	Name of the Project	Year	Price/Sq.Ft*	Current Price/Sq.Ft*	% of Appreciation	Current Rental Value
	Domain	2007	1950	5000	256%	30000