
KOCHI: Realty is in for a reality check. For generations, owning a home back in Kerala was the ultimate dream of many migrants from the state. However, times are changing. Second-generation non-resident Keralites are now less inclined to invest in building or buying a residence in their home state, opting instead for more liquid investment options.
Migration expert S Irudaya Rajan confirmed a significant shift in investment trends among non-resident Indians (NRIs). According to Rajan, chair of the International Institute for Migration and Development and former professor at the Centre for Development Studies (CDS), NRIs no longer view homes and land as viable investment opportunities.
“In fact, NRIs now refrain from buying or investing in houses and land unless they plan to reside in them,” Rajan told TNIE.
A recent study by Crisil, a leading ratings agency, corroborated this trend, highlighting a significant shift in the investment preferences of non-resident Keralites.
One of the key findings of a sentiment survey conducted before its Real Estate Conclave (CREC), held in Kochi in December, revealed that the NRI customer base had dropped sharply over the years.
A significant proportion of developers who were surveyed indicated that second-generation NRIs are less interested in investing in Kerala’s real-estate market due to better lifestyles and job opportunities in other markets.
‘Developers see decline in high-end homes demand’
The report adds that developers are witnessing a decline in demand for high-end homes, mainly because of the trend of second-generation Keralites working in West Asia, Europe, USA, and Canada preferring to settle overseas. This also suggests a shift in preference from luxury apartments and villas to more affordable segments.
The change also comes amidst reports that there are more than a million homes or residential buildings lying vacant or closed.
According to the 2011 Census, the state had approximately 1.12 crore census houses, with around 11.89 lakh remaining vacant. Rajan noted that in the past only NRIs could afford to purchase homes, pushing builders to focus exclusively on this demographic. However, the trend has changed. “Previously, people invested in homes as a financial asset, often owning three-four flats or plots of land. Now, they only buy with the intention of occupying the property,” Rajan pointed out. “Additionally, some individuals are selling their homes to join their children settled abroad, with no plans to return.”
As part of the data collection for the Kerala Migration Survey (KMS) 2023, many residences were found locked, because entire families had migrated. Around 4.2 lakh cases of family migration were identified in the survey.
KMS 2023 estimated the number of emigrants from Kerala to be 22 lakh, with total incoming remittances in 2023 pegged at Rs 2.17 lakh crore.