The real investment
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The real estate scene is witnessing significant investor-related activity. SHYAMA RAHAGOPAL finds out what has been happening on this front.
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IN KERALA, land has always held more promise than investment in the primary market. Shares and mutual funds have never enthused the investors here as much as land has. Even in the times of the big bull Harshad Mehta, the investors in the primary market were perhaps fewer compared to other States. The gold mine here has always been property.
Buoyed by the indicators, the property developers here are on a rush to make the most of the conditions, which were conducive to growth. The demand for land and housing is increasing but the fact remains that it is not going to be fully met.
The real estate dealers indicate that some major land developers from Mumbai, Delhi and Banglore have either acquired many acres of land and a few more are in the process of locating land. For someone in the real estate business, land is not at all scarce in Kerala. "One only needs to have the liquidity to invest," said K.A. Mohandas, partner of Link Land, a real estate concern.
It is not a boom like it was 10 years ago, when the market was propped up artificially by the rolling in of a few crores, opined P.S. Nair, partner, Link Land. This time the investors are real. "They are buying and holding the land," he said.
Land value
Land value has risen considerably over a year. There has been an appreciation of 200 to 300 per cent in value in certain places, said Mr. Mohandas. Kakkanad and the neighbouring areas in Thrikkakara have seen a major jump in prices.
Even in areas where the land value has been low because of access problems, the price seems to have risen, since there is promise of development.
The appreciation in land value is promising. "I have been advising many investors to put their money in land," said A. Anoop Kumar, financial consultant. Most of the investors are NRIs. While big players eye large tracts of land, the smaller investor is benefited too by holding small pieces of land.
Shot in the arm
The announcement of many big projects has come as a shot in the arm to the real estate sector in Kochi. Big investors from abroad have taken these projects as an invitation to start operations here. The corporates too will follow. The number of projects announced by builders here are pointers to the demand for housing. And all of them have takers to a large extent.
Of them a major chunk is likely to be made up of investors and not buyers who wish to satisfy their housing needs.
As far as investing in flats or villas are concerned, there is no uncertainty about it, said K. Lava, director of Skyline Builders. Moreover, it is easy to acquire a flat than a piece of land. There are no complications such as registration or building a compound wall or dealing with any legal issues.
The low interest rates helps too. Those who have taken a loan years ago are now thinking of investing in property again. For the fixed income groups, a bank loan can be used to fund the purchase of a flat, as it will cover a large part of the amount required. The only time a dip in the demand for flats was observed when there was an earthquake. Sale of flats had almost come to a standstill then, said Mr. Lava.
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