Indian Real Estate

Decline of Kerala Real Estate Market in 2024? Homes247 Report


30, January 2026

Yes, this question now haunts realtors in Kerala and most of us ask, Is there any truth to it?

Let's explore further

The state already is the news for a failing economy due to a myriad of factors, but now the bigger question is the decline of the real estate market.

The years 2023-24 were predicted to witness a great hike in the property market in Kerala, and till May of 2024 everything was a smooth sail, with a good number of upcoming submarkets for investments included however the subsequent months showed a slump.

There are differing arguments as cities like Kochi, Thiruvananthapuram, Thrissur, Kozhikode etc are seeing growth. But as we analysed the same from multiple angles, apart from these cities, the other urban areas and rural regions are seeing a significant fall from the earlier real estate transactions.

Kochi and Thiruvananthapuram are both Urban circles of utmost importance in the country right before the Pre-Indpendence era itself and are part of Smart City Initiatives. Thrissur and Kozhikode, are already commercial hotspots that attract a lot of talent and district-wise migration. Hence we really can't judge the virality of residential real estate just by these four cities.

Ranav Tranquil Haven

Let's explore some of the factors that the experts are quoting often as the root cause of the Kerala Real Estate Market's decline

Waning Gulf Dreams

The Residential Real Estate sector of Townships and Villages of Kerala has always been a very popular economic element ever since the Gulf Boom of the 1970s onwards as the majority of the expats aimed to buy a house and settle down.

The expats and migrants employed in Gulf countries could earn quite a lot as these countries were devoid of tax troubles.

However, now these GCC nations have lost their lustre as money-minting hubs due to the harsh conditions and growing preference for native employees. Nowadays more Kerala youth are migrating to European & American continents.

Decline of the Job Market

Kerala boasting of the highest literacy rates in India, is also home to a great number of educated youth of employable age. However the state does not provide enough jobs or has economic drivers to boost careers. Even now the entrepreneurial spirit is less or we daresay not supported enough in the prevalent cultural tapestry, and a considerable number still depend on Government jobs. Due to this, the average salary scale is also rather low for the kind of skills and education of an average employee.

Migration to Western Countries - Supply More than Demand

As mentioned before, the current trend amongst students and youth of employable age is to migrate to Western countries, in search of better opportunities and also due to the myriad of socio-economic conditions of the state.

Canada, the UK, Australia, Germany and EU countries top the list of dream havens for this generation. However, a majority of them are going abroad as students to complete their graduations and diplomas and hoping to turn around their lives with the "stay back" policy offered by these countries.

Thus to bear the expenses of the initial years and finance their education, most of the youngsters are taking loans or selling of their properties, which inturn creates an abundance of land/homes in the state.

Higher Home Loan Interest Rates

Acquiring a home loan is no easy feat in the state at the same time, the current home loan interest rates are also rather high given the present repo rates.

Nuclear Families

Kerala perhaps has the maximum number of Nuclear families. Most of the families would only be comprised of one or two children. In such situations, the children inherit the homes they are born in and are not required to purchase a new home. Even in the event they go outside their native or abroad, they ultimately come back to their roots.

New Styles of Construction - Space Saving & Cost Efficient

Kerala is also witnessing a new style of architecture and construction. These cost-efficient and space saving designs help people to build one-storey or multi-storey buildings in land parcels as small as 4-5 cents than the traditional Kerala architecture. As an adage to the earlier point, the properties or land parcels that are inherited by the children of these nuclear families will be able to build homes on whatever land provided by their parents and live peacefully without looking to buy another house.

Decline of Benami Properties & Black Money Transactions

One of the greatest socio-economic evils that plagued India was considerably curbed during the demonetisation. Black money transactions were majorly infused with the real estate segment and also Benami troubles. Though not completely eradicated, this brought down the large sums of untaxed money being converted unlawfully through real estate.

Loss of Interest in Agricultural Lands

Real Estate is much more than the residential segment alone, the interest in buying farmlands or plots for agricultural purposes has seen a rapid letdown in the past 5 years within the state. Thus there are literally hundreds of hectares of farmlands and plantations that are currently lying vacant or without use for any kind of vegetation or agricultural purposes.

While all these factors definitely have a negative impact on Kerala's real estate, we believe that it's too early to come to a conclusion as many of these can be reversed as well. As mentioned above, the rise of real estate in the chief commercial cities especially the apartments is seeing rapid growth these days. But we can't deny these facts as well as the great migration of Malayali youth means uncertainty in the air as well.

Thus if you are a real estate investor, remember the words of Warren Buffet "Be fearful when others are greedy, and be greedy when others are fearful.". So Think Wise and Make your Next Move

But what we want is to hear your thoughts

What do you think? Do share in the comments

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Jacob02, December 2024
Your observations are true .besides there is Hardly any possibility for appreciation .Availability of metro allows to opt for less Expensive houses\plots available a little far away
y@Jacob Your observations are true .besides there is Hardly any possibility for appreciation .Availability of metro allows to opt for less Expensive houses\plots available a little far away

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