Significant Growth in Sri Lanka Real Estate since 2009 - KPMG Report

15th January 2012, www.sundayobserver.lk

The market for real estate assets in Sri Lanka has shown significant growth since 2009 with a marked increase in price levels of real estate including bare lands, residential housing, commercial premises and condominium apartments, a KPMG report stated. Increased foreign investment interest in prime blocks of commercial land in Colombo, acquisition and resale of leisure properties by private investors and a general increase in confidence levels of household investors has fuelled the development of Sri Lanka’s property market during the past 24 months, the report said.

The changing landscape of Sri Lanka’s real estate market is likely to be further elaborated by shifting lifestyles of real estate buyers including broader acceptance for apartment style living, further cities becoming accessible and equipped with necessary infrastructure and a growing leisure sector across a number of districts in Sri Lanka. Further transformation is likely to take place and Colombo could emerge as a trade hub for South Asia.

Recent growth trends have shown increasing activity in the construction industry, housing, property sales and apartment projects. Individuals are also likely to have benefited from increasing property prices and appear to continue to invest in real estate.

The city’s landscape is currently in a state of transition with the government pursuing a policy of transformation that will beautify the capital’s landscape.

Unlike most emerging economies the urban population in Sri Lanka has not increased over the past five decades and only 15 percent of the population live in cities.

The Report stated that despite issues regarding the classification of urban and rural areas a vast majority of the population live in rural areas.

The population in the city is estimated around 900,000 while the floating population is around 500,000.

Sri Lanka Real Estate Market Brief - KPMG, January 2012