I have been tracking the real estate market in Kerala for over an year now. My interest in it was sparked by our very own Chief minister when he coined the term “Real Estate Mafia”. The amount of money that flows in this business is huge.
One year back real estate business took a hit all over India except for Bombay and Kerala. Even Bangalore saw 10% to 20% price decrease. Transaction volumes decreased sharply. But Bombay and Kerala were not affected.
In Bombay, there is enough cash flow to maintain the prices. Its the business capital of India. But what is so special about Kerala ? Its the exact opposite reason. We dont have any business here.
What are the investment options in Kerala for someone with loads of disposable cash. Think of an NRI who can pump in 20 to 30 lakhs every year. Where can he invest that money ? Land is the only safe investment for him.
That’s the beauty of the socialist attitude we have here in Kerala. We never allow good business to stay here. We are very hostile to new businesses. And we have earned that reputation among foreigners also. Every foreign delegation that comes to Technopark asks this question. “Ive heard that there are labour problems here. Is it safe to invest here”.
For Keralites, the only safe investment is in land and crores are being pumped into the market every year. This is the only reason why the prices are increasing.
No land reform or no law can remedy the situation. People will continue investing in land as long as we dont provide them with other options. No point in calling the real estate people a Mafia. They are rich helpless people looking for a place to invest their money.
Check my earlier post on Real Estate Mafia and Share Trading Mafia
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