Joined: 07 Jan 2012
|Posted: Mon Jan 09, 2012 5:25 am Post subject: Witnessing a widening gap in value in urban and rural areas
|The process of urbanization has resulted in an outward growth of the cities in Kerala, creating externalities in certain processes in the form of an increase in the number of sales and area demanded as the distance from the Central Business District (CBD) increases. The process has resulted in exorbitant increase in land prices, widening the gap between the urban and fringe land prices, decline in the area demanded per household, and the greater proportion of the owned land utilized for housing purposes leading to congestion and decline in production. Thus in Kerala Houses were sold at costs that reflected this market trend.
At the same time, it has also resulted in a higher growth rate in revenue, expenditure, professional and building taxes for the local panchayats in the fringe areas, enabling them to incur more developmental expenditure over the same period of time. Perhaps in no other city in Kerala can you see the local bodies earning significant revenues from the housing units under its jurisdiction.
Since the urban limits of the state of Kerala is in continuous expansion, and the urban developments have now surpassed the village areas and are moving on to the next most happening districts, more developments are likely to overtake key destinations in Kerala.
Land prices are even now hovering around a particular limit in Kochi. Even when the global recession has had an impact on certain sectors in the country, the real estate prices continue to hover at a particular level in this city. This is due to the fact that with more and more people are migrating to Kochi, the CBD is continuously expanding and even those real estate investments made in distant parts from the center of the CBD are now generating significant returns within a short period of time. Some analysts predict that the CBD in Kochi may even breach the boundary of the district of Ernakulam into the neighboring districts.