Too many empty apartments

A resurgent resale market, low NRI demand and increased migration have together led to an increasing number of vacant urban residential spaces in Ernakulam.


Real estate analysts point out that the majority of completed projects in Kochi  remain unoccupied.


“As many as 60 percent of completed projects are vacant in the city now. The rental market in the suburbs is also experiencing a slump,” said Joseph Nivin, managing director of Nivin Builders and Developers Pvt Ltd.


According to the  2011 census, Ernakulam district topped the list with 1,36,722 vacant houses, of which over one lakh was in the urban sector and the rest in rural areas. In Kerala 10.6 percent of the total houses are vacant. The construction cost of the real estate projects has increased by 15-20 percent since last Union Budget.



Responding to the problem of increase in  thenumber of vacant flats and houses, Deputy City Commissioner of Police T Gopalakrishnan Pillai, said the police are compiling details about vacant flats and houses in association with various residents associations. “Most of the unoccupied flats are owned by the NRIs. They had bought these projects as an investment. Normally they rent them out, but now most of these flats are vacant because of abundant supply,” he said.


“The NRI impact 0n the real estate market is almost over. But the employment opportunities, particularly in the IT sector, are on the rise. Builders have to target local market for better sales,” Joseph Nivin said.


Raising concern is the steep increase in prices, which has dampened the Return on Investment (ROI) prospects of investors.


“Because of the rise in the construction costs, the return prospects are bleak. Major cities in India give a return of at least 20 percent, whereas in Kochi the return on investment is below 10 percent. It is stopping customers from investing in new projects. The rental market also does not give much return to the investors,” Nivin said.