Keralam has around 18 lakh unoccupied houses, representing a massive pool of idle capital. Bringing even a portion of these properties into productive use could create new opportunities in property management, tourism, hospitality, insurance and technology.
For Malayalis, building a large house in their hometown with money earned abroad has long been a symbol of achievement. But many of these homes remain locked for most of the year.
According to data from local self-government institutions, around 18 lakh houses in Keralam were unoccupied as of 2022. This was equivalent to about 10.6 percent of the state’s total housing stock, based on the 2011 Census.
Around 60 percent of these houses are believed to have been built by Non-Resident Indians (NRIs). Keralam’s remittance inflows rose sharply from ₹85,092 crore in 2018 to ₹2,16,893 crore in 2023, an increase of 155 percent.
Yet much of this money continues to flow into land purchases and expensive house construction rather than productive investments. Pathanamthitta alone has more than 60,000 unoccupied houses.
The result is a huge stock of capital generating little or no economic return.
There are three major obstacles preventing these properties from entering the market.
The first is emotional. For many Malayalis, selling a family home or renting it out for the long term is not merely a financial decision. Property is closely tied to family memories, social status and the expectation of eventually returning home.
This creates a large ‘shadow inventory’ of properties that technically exist but rarely enter the rental or resale market.
The second problem is the absence of a well-organised property management ecosystem. There is still no widely trusted and transparent system through which an NRI living in the Gulf, Europe or elsewhere can hand over a property for maintenance, tenant management and rental collection.
The third is policy uncertainty. The state government’s 2023 Budget proposal to impose an additional property tax on NRIs owning multiple houses was withdrawn within a month following strong opposition.
The government therefore faces political constraints in using taxation to push owners to unlock idle properties. Incentive-based measures such as the K-HOME initiative may prove more practical.
The huge stock of locked-up houses could create opportunities across several sectors.
For proptech and property management companies, there is scope for an ‘NRI property trust’ model that combines property verification, maintenance, tenant screening, rent collection and regular reporting.
A professionally managed system could address one of the biggest concerns of overseas property owners: whether their assets are being properly maintained and whether tenants are reliable.
The potential market is enormous, given the sheer number of unoccupied properties.
The hospitality sector could also gain significantly.
Foreign tourist arrivals to Kerala increased from around 3.5 lakh to 6.5 lakh in 2023, an 88 percent increase. Rising tourist numbers are creating demand for affordable accommodation.
If the K-HOME scheme is implemented effectively, unoccupied houses could become part of a new asset-light hospitality segment, particularly in areas outside the major tourist centres.
Instead of remaining locked for most of the year, suitable houses could generate rental income while also expanding Kerala’s accommodation capacity.
Thousands of homes that remain empty for much of the year also represent a potential market for insurance and security technology companies.
Remote monitoring, smart locks, IoT-based security systems, property inspection services and specialised insurance products for vacant homes could become important business segments.
A professionally managed vacant-home ecosystem could reduce risks for owners while creating recurring revenue opportunities for service providers.
Keralam’s high proportion of unoccupied houses is not simply a consequence of migration. It also reflects the state’s deep-rooted investment preference for land and buildings.
In many other states, NRIs diversify their wealth through equities, mutual funds and businesses. In Keralam, a significant portion of overseas earnings has traditionally been converted into land and concrete structures.
The result is a paradox: Keralam receives substantial capital through remittances, but a considerable part of that capital remains locked in assets that generate little economic activity.
Unlocking this capital will require action from both the government and the private sector.
A stronger legal framework that protects both landlords and tenants could encourage more owners to enter the rental market. This would help address the fear of legal disputes that keeps many NRI homeowners from renting out their properties.
The government, or trusted cooperative institutions, could create formal systems for maintaining and leasing NRI-owned houses.
Another possibility is to allow suitable unoccupied properties to be used as collateral for low-interest loans to NRIs seeking to start new businesses.
Such measures could turn dormant property wealth into productive capital.
The central issue is not a shortage of capital in Keralam, but how that capital is deployed.
If even a portion of the 18 lakh locked-up houses can be brought into productive use through property management, tourism leasing, insurance and fintech-enabled liquidity solutions, the impact could extend well beyond the real estate sector.
It could create new businesses, generate employment, expand tourism capacity and improve the productivity of capital that has remained idle for years.
Keralam’s 18 lakh locked-up houses are therefore not merely a housing statistic. They represent one of the state’s largest untapped pools of economic value — and potentially a significant new business opportunity.
(The author is a professor at CUSAT and Director of the Centre for Budget Studies. This article was originally published in Dhanam’s Onam special issue.)