Kerala Property: Kochi shows signs of upswing after period of lull. Trivandrum not too behind.

If you go by the residex index published by NHB on a quarterly basis for property movements, the Kochi property market is now back on an upswing and the Trivandrum property market is not lagging behind either. We have tracked the price movements in Kochi and Trivandrum property on a regular basis over the past few quarters and Kochi has reported stable prices

Residex Index Levels in India

Across India cities like Chennai, Jaipur, Delhi, Mumbai have reported upswings in prices. Barring Chennai where property rates have climbed 50% in the last couple of years on a year on year basis and over 200% in the last 4 years, most other markets have reported marginal upswings or exhibited stable prices.

Kochi Property Market and Movements

From levels of 72 on a scale of 100, the index for Kochi has climbed back to 82. What this really means is property prices are back to the 2011 levels (spurred by this 11% growth) and indicates a tendency to climb further. The growth could be accounted party due to the festive season of Onam which has increased bookings and the investor friendly announcements made by the government and efforts to bring Kochi metro back on track.

The real beneficiaries of the property price rise in Kochi has been areas like Elamakkara North; Podukalavattom; Vaitilla; Amaravati (Edapally Zone) and areas Fort Kochi Vili; Karugapalli; Vennala; Mammankalam (Central Zone). The edapally area has reported price rise of 25% last quarter and the Central zone has reported price rise of 33% over the last quarter.

For property investors in Kerala, the news of a stable market or upswing in Kochi is both a relief and also a motivator. Many have believed in the so called bubble in the property market in Kerala for long. And we have also written extensive articles analyzing the nature of this bubble. Although the global recessionary trends and the exodus of Gulf Malayalees due to dearth of jobs has put a dent on growth in prices in the state, Kochi seems to be the leading indicator of where the markets are headed with respect to Kerala. With lots riding on Kochi metro and other projects announced during the Emerging Kerala forum conducted in September 2012, real estate owners and investors would be heaving a sigh of relief with the results of the Kochi residex index. 

Trivandrum Property Market and Movements

In the case of the Trivandrum property market, although residex is not officially reported by the NHB, our research with leading banks and financial institutions conducted in the city, has revealed that property transactions are happening on a consistent basis, although not at a rampant pace as was seen in 2010. Property buyers are making much more prudent investments considering factors like location, rent, quality, previous track record of builders and other aspects.

This is a good sign as it puts the developers and the customer in a win-win situation with the real buyers stepping in instead of investors. As mentioned in our previous articles, the choice of investment in property be it villas, flats or land, requires its due consideration and one should take it into account all factors before making a decision.

Projects like Trivandrum Monorail or the Vizhinjam Transhipment terminal would put Trivandrum's real estate growth on a different trajectory all together, although they have seen many a hurdles and progress on them has been slow or non existent. Any of these projects taking off could see a spurt in prices and thereby smiles on the faces of many a happy investor who bought property in Trivandrum during 2012 or 2011.However one would have to wait and watch to see if any significant upswings in price movements happen in the near future due to other macro economic factors.

For comments, queries or suggestions on this article write to our market research or editorial teams at nandanamconsultants@gmail.com. We would be happy to hear your feedback and will try to respond at the earliest.