NRI interests and Festive offers-chief drivers of apartment boom.

A port town with huge unmet real estate requirement, demand exceeds availability at the prime locations. As in all Indian cities, Kochi too is witnessing suburban development - towards Kakkanad in the eastern end of the city. Capital values for residential apartments have shown a rise of about Rs 300/ sq ft over the last couple of months. Plot values currently hover at about Rs 7100/Sq.Yard . However, even more significant than the marginal rise in values is the fact that a very large number of purchases of Kochi apartments took place during the festive period. The Onam festival being a period of considered auspicious by the people, saw a large number of transactions. This has led developers and brokers to expect that people are looking forward to invest in real estate big time. A Kochi broker, Srinivasan analyses the trend further. "Similar to Diwali, Onam also brings in special offers and schemes, like discounts and easy home loans for the buyers". The special schemes lure the customers to invest in the property and also "since the period is considered propitious, people generally prefer to buy during this period".

While a considerable number of Kerala residents dwell in foreign countries, real estate in Kochi has always been the subject of NRI interest. Of late, the surge created by influx of IT/ ITeS based companies in the property markets has also resulted in soaring property prices in Kochi. A large number of employees are settling in the city and the demand for Kochi apartments has visibly impacted the capital prices and rental values of properties here. Nevertheless, the NRIs have no pangs over the same and property investment in Kochi is still their one of the favorite options, sources informed. According to the property dealers in Kochi, most of the NRIs look for sea-facing residential properties in the city. Perhaps, that's why localities around Marine Drive and MG Road are the most premium residential locations in the city. However, the vacancy rates in these areas are at rock bottom and hardly any properties are available for the sale. Also, the markets experts feel that the prices are too high now and do not offer room for further growth from investment point of view. Consequently, NRI investors have been reportedly taking interest in sub-urban locations like Kakkanad, Edappally, Kalamssery, i and Thripunithura. Extensive construction activities are underway in these areas, and real estate majors like DLF, Puravankara, Sobha, Prestige have lined up their ambitious projects across these areas so also are international names like Emaar group.

Given the boom in Indian real estate in the past couple of years, prices of apartments at Marine Drive shot up by almost 300 per cent from Rs.1,500-Rs 2,400 psft to Rs.5,000-Rs 7,000 psft, in the period between 2005 and 2007.The capital values for apartments at the aforementioned suburban locations are in the range between Rs.1,500 and Rs.4,000 per sq. ft. There are two ways of deciding on your real estate purchases in Kochi – the yield on your investment or the affordability of premium property.
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