Trivandrum: Money is not flowing into the real estate sector as it once did. Most of the hyped up projects remain on paper and people are not keen to invest in land or apartments as they once did. While land deals still continue in steady state, they are no longer the money-spinners it used to be.
"The entire sector is going through a period of stagnation. Earlier, the brokers used to add generously into the original price of land to gain maximum profit. Seeing this, those having plots nearby would also increase their price. That was how the prices went up. Now it is not happening because no one is willing to buy for that much," said Kishore, Manager, Keralarealestate.com
Many reasons are being pointed out, one of them being the change of power at the centre. The controversies surrounding the land bill and the strong drive against black money have made investors step back. The lack of development is also an issue.
"The most demand for land is still at Kazhakootam-Mangalapuram stretch where the proposed Technocity is to come up. But even there, there has been a lull," says Kishore.
It's is not just the land deals, the construction sector is also going through a bad phase as of now. The sight of new high-rises springing up almost on a weekely basis has now more or less vanished. Many under-construction buildings are still under construction with no end in sight. Builders blame government for it.
"We have got around 10,000 flats in under-construction stage which have already been sold. As many as 3,000 upcoming ones have been put on hold as well. The government won't give safety clearance for it. They haven't been able to clarify on norms even," said CREDAI vice-president S N Reghuchandran Nair.
The disillusionment with IT sector is another factor as it was the main driving factor for the boom in real estate. The real reason, land dealer's say is the disillusionment with government policies.
While many multi-million dollar projects like Monorail, Technocity and high-speed rail were mooted, nothing happened. The lack of development plus skepticism towards Centre's policies have brought the growth in real estate sector to a screeching halt.