Bengaluru: The West Asia war has had a polarising impact on Kerala's property market, with homebuyer enquiries rising but construction costs, supply chain issues, and delayed projects also rising sharply.
The war has shaken the confidence of the large Keralite diaspora in the UAE and the Gulf region, in general, giving rise to a wave of property enquiries in India. Layoffs in Dubai, a confused regional outlook, and a reassessment of overseas investment options are prompting NRIs to consider both luxury and mid-income homes in Kerala, Sethunath M., chief executive of industry body Confederation of Real Estate Developers' Associations of India (Credai) Kerala, told Mint.
“The war has been good and bad for Kerala…People are thinking of coming back, and we expect there will be more requirements for both luxury and mid-income homes in the coming months," Sethunath said.
Prestige Group and Sobha Ltd, two of Bengaluru's developers with projects in Kochi, Calicut and Thrissur, have both flagged an increase in NRI inquiries in recent weeks.
Praveer Shrivastava, associate director, residential, at Prestige Group, said, “We have seen an increased number of queries from NRIs and expats who are looking at properties in Kochi and Calicut. People are reconsidering investment options and looking outside Dubai. There are also some who have not spent many years in UAE or Dubai and want to come back.”
Rising costs, labour woes
Yet the supply side tells a different story: crude oil price volatility and disrupted global shipping routes have driven up the cost of tiles, PVC pipes, copper wires, and other construction inputs, with some materials rising 30–35%. Kerala, which sources most of its construction materials from outside the state, has been hit harder than others.
S.N. Raghuchandran Nair, managing director, SI Property (Kerala) Pvt. Ltd said that with most construction materials shipped or transported from outside the state, the impact has been significant.
Labour shortages compound the problem as migrant workers from West Bengal, Uttar Pradesh and Jharkhand, the backbone of Kerala's construction workforce, have been slow to return after leaving for the elections.
The net effect is a market under pressure. Industry body Credai Kerala said demand is genuine and non-speculative, unlike the investor-driven pressure seen in north India, but warned that cost escalation and supply-chain stress could reduce the demand increase if left unaddressed. Developers are moving ahead with planned launches, betting that NRI anxiety will build up into signed agreements rather than delayed decisions.
Developers forge ahead
Even as projects completions have been impacted, the launch pipeline in key cities of the southern state looks healthy.
Kochi-based Asset Homes recently said it will launch 28 residential projects in Kerala with an estimated development value of ₹5,100 crore in 2026-27.
On the commercial real estate front, Bengaluru’s Brigade Group had the foundation stone laying ceremony of its World Trade Center project in Kazhakootam, in suburban Trivandrum.
In its latest post-earnings analyst call in May, Jagadish Nangineni, managing director of Bengaluru developer Sobha Ltd, said the reasons for investment in West Asia and in local markets might be quite different.
“We can see that there can be slightly better opportunities for us to capitalize on the more or renewed interest in India,” he said.
Sobha has project launches lined up in Calicut and Thrissur in the September-ended quarter this year.
Before the war, the southern state was a largely steady market with residential sales split between domestic and NRI-led demand. Over the last decade or so, domestic demand has overtaken NRI demand, which several years ago commanded a large share of Kerala housing sales.