Flats in Kochi: Challenges Faced by Emerging Real Estate Startups

Posted onFeb 22, 2025

growth of sustainable real estate in Kochi

There is a huge scope for startups in any sector. The real estate market trends in Kochi indicate that it is on an upward trajectory; however, real estate startups are also facing numerous challenges. Let’s take a look at the key problems they have to overcome:

Financial Stability

Finance is the lifeblood of any business, and real estate is no different. Funds are required to purchase land, and equipment, meet daily materials and wage requirements, and market the project properly. This is especially true where apartment buildings are concerned. Conventional financial institutions are cautious when it comes to emerging players in the real estate segment as there are many risks involved. Delays in raising capital or mismanagement of funds can result in project delays and loss of reputation.

Regulatory Compliance

Acquiring the right land is actually a complex task, as most of the prime locations are already taken. Additionally, there are many legalities to be followed, and prices keep increasing. There are several regulations to be followed, like getting clearances and permits, adhering to zoning regulations, and complying with RERA norms. Startups that have just entered the real estate market can find it increasingly challenging to navigate these regulations and complexities.

Competing With Market Giants

The real estate market is dominated by reputed and established developers who have a robust brand presence, extensive resources, intricate networks, and so on. It can be extremely challenging for a newcomer to compete with such industry leaders and gain the trust of potential buyers. The proven success track records of leading builders and the competitive pricing they are able to offer are not easy for new entrants to match.

Market Volatility

The real estate market is especially subject to fluctuations and volatility, due to domestic and global factors that are not within anyone’s control. Economic and geopolitical uncertainties, tensions, and market fluctuations necessitate foresight and adaptability on the side of industry professionals. Strategies you formulated a few years ago are not likely to hold true today. They need to be re-evaluated; you need to be agile to navigate market trends that keep shifting.

Rising Interest Rates

When interest rates increase, the cost of borrowing funds increases, impacting both builders and home buyers; this can halt the momentum of growth of the real estate market. It is hence imperative to explore alternative instruments and solutions to mitigate this risk and ensure continued viability.

Supply Chain Disruptions

The real estate segment is also highly susceptible to supply chain disruptions. Whenever there is any problem with the availability or an increase in the cost of materials, there can be significant delays in project completion, thereby pushing up the cost of construction, and eventually, the individual apartments.

Technology Integration

The impact of technology on the real estate market in Kochi is there for all to see. The leading builders today use AI and VR, providing virtual tours of their properties. Prop tech has made it easy for buyers to compare properties on the basis of various factors. Property management systems and transactions make use of blockchain technology too. The new players have to face these challenges head-on by investing in training programs and familiarising themselves and their employees with these technologies.

Managing Risks and Delays

There are numerous situations which are completely beyond our control, that can lead to risks and delays. Labour shortages, strikes, weather conditions, and even improper project management can create delays and increase project costs. A sudden increase in the cost of materials is another big risk. Startups have to learn to deal with such risks and establish steps to mitigate or eliminate them in the future.

Conclusion

When newcomers in the real estate sector face many challenges, established developers like Varma Homes already have systems in place to handle all exigencies.  As one of the leading builders in Kerala, we have built strong relationships with suppliers to ensure the continuous availability of materials and eliminate disruption in operations. All our projects are approved by RERA, and we deliver them within the promised time, with no delays or increases in cost.

Come check out our impeccable 2 and 3-BHK flats in the most prestigious locations of Kochi.

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FAQ’s

What are the primary financial challenges faced by real estate startups in Kochi?

Real estate startups in Kochi often struggle with securing adequate funding to purchase land, cover construction costs, and market their projects effectively. Financial institutions may be hesitant to lend to new players, making it difficult to maintain financial stability and manage cash flow efficiently.

How do regulatory challenges impact new real estate startups in Kochi?

Emerging real estate startups face significant challenges with regulatory compliance, including acquiring land in prime locations, navigating complex legal requirements, and adhering to RERA norms and zoning regulations. These challenges can delay project approvals and increase costs for startups unfamiliar with the legal landscape.

What strategies can real estate startups in Kochi employ to compete with established market giants?

Newcomers in the Kochi real estate market can focus on niche markets, innovative marketing strategies, and leveraging technology such as AI and VR to differentiate themselves from established players. Building a strong brand presence and fostering customer trust through transparent practices and quality services are also crucial for competing effectively.