Introduction to Kodaikanal’s Real Estate Market Trends

KodaikanalKodaikanal in Tamil Nadu is one of the most charming and picturesque hill resorts in the country. Located not far from Madurai town, the city nestled among the Kurinji hills, is a popular hill station, surrounded by nature’s splendor. Known to be a sleepy town a decade back, Kodaikanal over the past few years is beginning to get notable attention as an ideal holiday getaway with its pretty lake, misty landscape, and a serene, romantic and peaceful hideaway in its green ranges. This trend of surge in tourists can also be attributed to growth of its real estate sector which has seen a lot of movement in the past few years.

The reasons for Kodaikanal coming to the fore as a major holiday home buyers’ and retirement destination is its easy access to cities like – Bangalore and Mysore – both about seven and half hour’s drive from here and Chennai (about eight and half hours) making it a perfect weekend getaway. The growing influx of tourists to this idyllic resort during summer months over the years saw demand exceeding supply and quality hotels and holiday homes continued to be in short supply. With corporates predominantly from these cities reviving their interest to invest in real estate and rising prices in Mysore and Bangalore is also helping Kodaikanal’s real estate fortunes.

Speaking to us, local real estate agent Mr. Mani Vanan said, “In my opinion there are two reasons why Kodaikanal is witnessing such demand for properties. The first is that with hotels’ tariff zooming during the peak season, those keen to enjoy an extended period here are now looking for cheaper accommodation and with rising rental returns people find it more profitable to buy a property, stay there when they want and for the rest of the year rent it to their colleagues or friends whom they know. This way a considerable part of their EMI is also taken care of if they had bought the property on a loan.”

“Another reason is that several companies and exporters are looking at properties here as guesthouses to entertain their overseas business partners and importers. But this is not the only reason why they are buying a villa here. They can earn lucrative yields on their investment too. Then there is another segment actively looking for leasing deals with villa developers. All these reasons are keeping developers interested and you will find new developments being launched on a monthly basis to keep pace with this demand,” Mr. Vanan added.

Pricing of properties in Kodaikanal:

According to Mr. Vanan, “Land prices in Kodaikanal vary quiet dramatically depending on where you are planning to buy. Locations in and around the city can cost around INR 250 to 300 per square feet or more while locations a little away from the city can be bought on an average of INR 125 to 150 per square feet. Meanwhile a 2BHK villa, of say, 700 to 750 square feet will cost around INR 37 to 42 lakhs.”

And what about appreciation?

According to Vijayakumar PV of Vishva Properties, “…buyers can expect a return of 10 to 15 percent per annum on their investment besides capital appreciation.”

“Actually the demand for housing here is also resulting in an appreciation of property rentals, which gives an opportunity for buyers to make bigger than usual gains. And add to it the low crime rate…buyers are very comfortable renting their properties rather than keeping them locked.”


After what we have seen of Kodaikanal it is perhaps safe to say that the time is just right to invest in a property either for a sojourn during peak summer and to earn lucrative yields on your investment in other months.