The Hindu Business Line : Demand for flats fuelling construction boom in Kerala

SAFETY and security concerns are a major factor in many people opting for apartments in cities and towns in the State, resulting in a boom in construction industry. According to sources in the construction sector, ready flats have all been sold out while new projects in various stages of completion are also booked.

"The demand is testimony to people's preference shifting towards community living," a senior official of Skyline Apartments told Business Line. A nuclear family, where both husband and wife are working, prefers a flat for safety, security and, of course, convenience, he added.

Even well-known and affluent local families having ancestral homes are now living in apartments. The increase in crime rates in recent times had a direct role in these people opting for community living, he said.

For aged people, apartments are definitely more convenient, while working couples can engage part-time servants besides seeking mutual assistance from those living next door. "Thus, considerations of safety and convenience have take precedence over factors such as cost of living," the source said.

In the past, people used to buy flats just a few years before their retirement. But now, young professional couples in their late 20s are buying flats, thanks to the higher earnings and low-cost loans extended by banks. Added to this is the income tax benefit available on housing loan interests, Mr Rafi Mather, Head of Mather Constructions, told Business Line.

He said that flats costing Rs10 to 30 lakh were in good demand and this segment constituted around 80 per cent of the market. Around 5 to 10 per cent go for super luxury flats costing above Rs 40 lakh. At the same time, there are flats available for Rs 5 lakh to 10 lakh also for the low and lower middle-income groups.

According to Mr Mather, 50 to 60 per cent of the buyers are NRIs. He said that in Kochi alone, there would be a business of around Rs 2,000 crore in the next three years while it would about Rs 4,000 crore in the State.

The cost of construction has, however, gone up by 50 per cent in recent months due to unrealistically high prices of land and increase in the cost of construction materials because of the hike in fuel prices and other taxes. Consequently, this has reflected in the cost of flats.

The cost per square feet in Kochi ranges between Rs 1,200 and 1,600, depending upon the locations in the city while in the suburbs such as Kakkanad, it is between Rs1,100 and 1,300, the sources said.

Land prices are "unreasonably high." Infrastructure facilities such as access road, power and water supply are abysmal. According to the sources, if there were good roads, more land would become available and that in turn would bring down the prices.

The situation in city suburbs such as Tripunithura is no different. There is good demand for apartments there because of the relatively low prices. "The number of enquiries has gone up in recent months about the availability of flats, Mr Jayanthan Namboothiripad of Sri Hari Apartments, said.

According to the builders, constructions are undertaken strictly in accordance with engineering norms. However, "standardisation in construction is still conspicuous by its absence and it is a big problem," they added.

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