Kerala real estate market forecast 2025-26 indicates steady growth, with the market at the intersection of tradition and transformation – where lush landscapes meet smart infrastructure, and sustainable living becomes the new aspiration.
Over the past few years, real estate investment in Kerala has shifted from modest coastal developments to vibrant mixed‑use communities – driven by expanding urbanisation and improving infrastructure. Forecasting these trends gives you clarity to identify high‑yield opportunities and take informed buying decisions; while guiding developers in planning projects that align with emerging demand.
Kerala real estate trends 2025 indicate continued focus on sustainable developments, gradual increase in property values in emerging markets such as Thrissur and Kollam, and steady interest in luxury waterfront residences. You may also expect incentives from government policies designed to promote housing in different segments.
As the state undergoes rapid urbanisation, infrastructure expansion, and evolving demographic dynamics, its real estate market is entering a phase of transformative growth. This blog explores the multiple aspects shaping the landscape over the next two years.
Table of Contents
Snapshot of Property Market in Kerala
The state’s real estate snapshot reveals balanced growth across residential, commercial and retail segments. Residential demand remains robust in Kochi, Trivandrum, Kozhikode, and Thrissur – with supply keeping pace due to new launches. Commercial space sees rising occupancy in business hubs, even as retail thrives in high streets.
Marine Drive and Kakkanad in Kochi, along with Technopark in Trivandrum, have emerged as hotspots offering attractive rental yields and capital appreciation. Infrastructure projects such as Smart City Mission and NH66 expansion enhance connectivity, boost investor confidence, and support sustainable urbanisation. Overall, expect steady market expansion with pockets of high growth.
Key Trends Expected in 2025-26
Kerala real estate 2025 is expected to experience significant transformations driven by various trends, some of which are described below.
a. Rise in NRI Investments
Expats are increasingly considering Kerala for lifestyle, retirement, and high rental yield opportunities. The state’s serene environment, coastal beauty, and modern infrastructure make it an ideal place for those seeking peaceful living or retirement. Preferred property types include villas, apartments, and gated communities in prime cities such as Kochi, Trivandrum, and Alappuzha – offering high returns and secure investments.
b. Growth of Tier-2 and Tier-3 Cities
Cities like Palakkad, Kottayam, Kannur, and Kollam are emerging as new investment hotspots. They benefit from enhanced connectivity, including improved roads and ongoing expansion of rail and air infrastructure. Urban development initiatives are boosting commercial and residential property demand here.
c. Sustainable and Eco-friendly Developments
There is a rising trend towards these developments, with more buildings incorporating rainwater harvesting and solar power. Demand for wellness-oriented, nature-integrated communities is growing, reflecting a shift towards green living.
d. Tech-driven Real Estate
Technological advancements are transforming Kerala real estate 2025. Smart homes, virtual site visits, and digital transaction platforms are gaining traction. PropTech adoption by developers is enhancing property management, offering more streamlined processes and better customer experiences.
e. Steady Price Growth Nationwide
A Reuters survey projects average home prices in major Indian cities to increase by ~6.5% in 2025 and ~7.5% in 2026, with luxury properties being the biggest drivers. Aligned with this national trend, Kerala is projected to experience growth in the 5-7% range, particularly in large urban centres such as Kochi and Trivandrum.
Factors Influencing Property Market in Kerala, in 2025-26
The market is experiencing dynamic shifts influenced by policy reforms, sectoral growth, and economic factors. These factors collectively position it for sustained growth, attracting both domestic and international investors.
1. Policy Reforms and Government Support
The introduction of RERA 2.0 mandates that developers obtain a compliance clearance certificate before launching or advertising new projects, ensuring transparency and accountability. Additionally, digitisation of land records and implementation of single-window clearance system streamline approvals, reducing delays and enhancing investor confidence.
2. Tourism and Hospitality Revival
The state’s tourism sector is rebounding, with the aim being to complete 100 tourism-related projects in 2025. Initiatives like ‘Loka Kerala Kendram’ and simplified e-visa norms are expected to boost international arrivals. Union Budget 2025 allocated ₹385 crore to tourism, with ₹80 crore dedicated to international marketing and promotions.
3. IT/ITES Sector Growth
Kochi and Trivandrum have emerged as prominent IT hubs, with significant investments in infrastructure. The inauguration of Lulu IT Twin Towers in Kochi, a ₹1500 crore project, and establishment of ‘Freedom Square‘ at Technopark Phase IV in Trivandrum underscore the state’s commitment to fostering a digital-first economy.
4. Interest Rates and Housing Loan Trends
RBI’s recent repo rate cuts are leading to reduced home loan interest rates, currently ranging from 6.8% to 7.5%. This decline enhances loans for homebuyers and stimulates demand in the real estate sector.
10 Investment Hotspots to Watch
Kerala real estate market forecast 2025-26 indicates promising investment opportunities across various locales. Each of these offers unique advantages catering to different investor profiles. Whether you are seeking luxury waterfront properties, IT-centric developments, or family-friendly gated communities, real estate investment in Kerala presents diverse, strategic opportunities. Here’s a concise overview of key hotspots:
Kochi
- Marine Drive: Prime waterfront locale, with luxury developments like Marina One offering 3 and 4BHK apartments. The area has excellent connectivity and social infrastructure, making it ideal for high-end residential investments.
- Kakkanad: Home to Infopark and SmartCity, Kakkanad is a hub for IT professionals. The ongoing development of Bliss City and metro expansion enhances its appeal for both residential and commercial investments.
- Aluva: As per Kerala real estate trends 2025, this is emerging as a strategic location for mid-range residential investments, due to significant infrastructure projects like the new Aluva market and road widening initiatives
Also read: https://www.sobha.com/blog/localities-in-kochi-for-nri-property-investment
Trivandrum
- Kazhakkoottam: Adjacent to Technopark, this area is witnessing a surge in demand for residential properties due to its proximity to IT hubs and improved infrastructure
- Vellayambalam: Well-established locality offering a mix of residential and commercial properties, benefiting from its central location and connectivity
- Technopark: As Kerala’s leading IT hub, this continues to drive demand for both commercial and residential real estate – making it a stable investment choice
Kozhikode (Calicut)
- Civil Station: The administrative heart of the city, this area is experiencing growth in commercial real estate – with increasing demand for office spaces
- Pantheerankavu: Known for its residential appeal, Pantheerankavu offers a range of properties, from mid-range flats to luxury villas – attracting a diverse demographic
Thrissur
- Punkunnam: Rapidly developing area, with a mix of residential and commercial properties, and ongoing infrastructure improvements that are expected to drive further growth
- Amala Nagar: Proximity to Amala Medical College makes this area attractive for healthcare professionals and students, leading to steady demand for rental properties
Challenges & Risks
Kerala real estate trends 2025 indicate certain issues that investors and developers should note. Homebuyers should conduct thorough due diligence and consider the factors described below, to take informed decisions in the state’s evolving real estate landscape.
- Overbuilding in Select Pockets: Areas like Kakkanad and parts of Kochi have experienced rapid development, leading to an oversupply of residential units. This saturation could result in reduced rental yields and slower capital appreciation, posing risks for investors.
- Regulatory Delays and Land Acquisition Hurdles: Projects such as Sabari Rail corridor have encountered delays due to land acquisition issues. Similarly, the digital resurvey initiative has fallen behind schedule, impacting land record updates and project approvals.
- Climate Vulnerability in Coastal Zones: Coastal regions like Chellanam and Kannamali are increasingly susceptible to erosion and flooding. Despite ongoing protection efforts, these areas remain at risk, affecting property values and insurance costs.
Expert Predictions & Market Statistics
In 2025-26, the property market in Kerala is poised for moderate growth – driven by urbanisation, infrastructure development, and increasing demand across various segments. Overall, it presents promising opportunities for investors, with balanced outlook across various segments.
1. Market Size and Growth Projections
The residential real estate sector is expected to grow at compound annual growth rate (CAGR) of 8-10% – influenced by factors such as urban migration, government infrastructure projects, and rising disposable incomes. Commercial real estate is projected to grow at 6-8% CAGR, supported by the expansion of IT and financial services sectors.
2. Price Trends
- Apartments: Cities like Kochi and Trivandrum are witnessing a surge in demand for luxury apartments, leading to price increases in prime locations
- Villas: As per Kerala real estate trends 2025, there is a growing preference for villas, especially in Kochi, Alappuzha, and Wayanad – driven by NRIs seeking premium properties
- Plots: Land prices are appreciating in emerging towns such as Palakkad, Thrissur, and Kollam, attracting investors looking for long-term gains in Kerala real estate 2025
3. Expected ROI
Investors can anticipate moderate ROI, with residential properties offering steady rental yields and potential for capital appreciation – particularly in well-connected and developing areas. Commercial properties in IT hubs are expected to provide stable rental income due to sustained demand.
Tips for Buyers and Investors in 2025-26
Real estate investment in Kerala requires careful consideration to ensure secure and profitable ventures. By conducting thorough due diligence and aligning your investment choices with personal goals and risk tolerance, you can navigate the market effectively.
Legal Due Diligence
Engage a qualified property verification lawyer to facilitate this process, with expertise in document scrutiny and legal compliance. Before purchasing property, verify essential documents such as:
- Title Deed: This confirms the seller’s legal ownership and right to sell
- Encumbrance Certificate: EC ensures the property is free from legal dues or loans
- Occupancy Certificate: OC validates that the property complies with municipal regulations and is ready for habitation
- RERA Registration: Check for registration under the Real Estate (Regulation and Development) Act to ensure transparency and accountability
Construction Status
Choose based on your financial capacity and investment goals:
- Under-construction Properties: Generally more approachable financially, offering customisation options and potential for value appreciation upon completion. However, they carry risks such as construction delays and project uncertainties.
- Ready-to-Move-In Properties: Provide immediate possession and the ability to assess the final product’s quality. They come at a higher price, but offer certainty and lower risk.
Investment Tips
- Location Analysis: Research areas with planned infrastructure developments, such as new transport links or commercial hubs, to identify high growth potential
- Developer Reputation: For your real estate investment in Kerala, invest with reputable developers known for timely delivery and quality construction to mitigate risks
- Legal Compliance: Ensure all necessary approvals and registrations are in place to avoid legal complications
Conclusion
Kerala real estate market forecast 2025-26 indicates steady growth – driven by infrastructure development, increasing demand for residential and commercial properties, and growing tourism sector. While challenges such as overbuilding and regulatory delays persist, the market offers strong potential for long-term investment.
With rising interest in IT hubs and emerging areas, investors can expect excellent returns on properties in prime locations. Homebuyers and investors should prioritise trusted developers like SOBHA, known for delivering high-quality, well-verified projects that ensure reliability and long-term value – making them an excellent choice in the rapidly evolving property market in Kerala.
FAQs
1. What is the outlook for Kerala real estate market forecast 2025-26?
The outlook for Kerala real estate market forecast 2025-26 indicates steady growth driven by infrastructure development, growing IT hubs, and rising NRI demand. While challenges such as regulatory delays may exist, key cities such as Kochi, Trivandrum, and Thrissur present significant investment opportunities with promising returns.
2. Are property prices expected to increase in Kerala in the coming years?
Yes, property prices are expected to increase in Kerala in the coming years, driven by growing demand in IT hubs, infrastructure development, and recovery in the tourism sector. Kochi, Trivandrum, and Thrissur are anticipated to experience the most significant price appreciation due to ongoing urbanisation and new projects – as per Kerala real estate trends 2025.
3. Which cities in Kerala offer the best investment opportunities in 2025?
Cities in Kerala that offer the best investment opportunities in 2025 include Kochi (IT-driven growth), Trivandrum (Technopark expansion), and Thrissur (excellent commercial potential) – making them top choices for both residential and commercial investments and offering strong appreciation potential and rental yields.
4. Why is NRI interest in Kerala real estate growing?
NRI interest in Kerala real estate 2025 is growing due to favourable ROI, improved infrastructure, and strong sense of connection to their home state. Additionally, the rise of luxury properties, growing IT sector, and attractive lifestyle offerings make the state a highly desirable investment destination for expats.
5. How will upcoming infrastructure projects impact real estate investment in Kerala?
Upcoming infrastructure projects will significantly enhance real estate investment in Kerala. Developments such as metro expansions, highways, and tech parks will further improve connectivity, accessibility, and urbanisation – making properties in Kochi, Trivandrum, and Thrissur more attractive, thus driving demand and boosting property values.
6. Is it better to invest in residential or commercial property in Kerala?
Both residential and commercial properties in Kerala offer strong investment potential – with the former providing good rental returns and long-term appreciation in growing urban areas; and the latter offering stable rental income and demand due to expanding business activities in IT hubs such as Kochi and Trivandrum.
7. What are the emerging hotspots in Kerala real estate 2025?
Emerging hotspots in Kerala real estate 2025 include Kochi’s Kakkanad and Marine Drive, Trivandrum’s Kazhakkoottam and Technopark, and Thrissur’s Punkunnam. These areas are benefiting from urban expansion, infrastructural development, and growing IT sectors – making them ideal for investment opportunities in residential and commercial properties in 2025-26.
8. What role will technology play in property market in Kerala?
Technology will play a pivotal role in property market in Kerala by streamlining property transactions, enhancing transparency, and improving construction quality. Smart homes, virtual property tours, digital documentation, and e-governance in registration and approvals will further boost the market’s efficiency, attracting both local and international investors.
9. What are the potential risks of real estate investment in Kerala?
Potential risks of real estate investment in Kerala include overbuilding in select areas, regulatory delays, land acquisition hurdles, and climate vulnerability in coastal zones. To ensure secure returns in a growing market, investors should carefully assess market conditions, verify legal documents, and consider long-term trends before committing.
10. How can buyers ensure legal safety while purchasing property in Kerala?
Buyers can ensure legal safety while purchasing property in Kerala, by verifying key documents such as title deed, encumbrance certificate, and RERA registration. It is also essential to check the property’s compliance with zoning laws and approvals. Consult trusted legal professionals and developers like SOBHA to ensure transparency and mitigate legal risks.
