In 2022, overseas buyer interest in Sri Lankan properties has increased by 40% as expatriates seek to invest in real estate in urban areas. The report attributes the hike to a decline in the rupee’s standing against the dollar, making property investments attractive.
Sri Lanka’s capital is experiencing sustained hikes in land values; the Colombo district saw its Land Valuation Index go up by 14.8% in the second half of 2022, according to the Central Bank of Sri Lanka.
Whether one intends to own or rent, the costs remain high, with fully furnished apartments increasingly scarce. The property sector is experiencing rapid growth, and local experts predict that the demand will continue to surge. As urban apartments sell like hotcakes, the demand may soon outstrip the supply, resulting in further soaring prices.
All of which is likely to exert additional financial pressure on those aspiring to become homeowners, as the economic crisis has rendered loans unaffordable for many. The escalating interest rates have amplified the financial burden.
While the high demand and escalating prices pose challenges for aspiring homeowners, existing property owners stand to benefit, with a lucrative opportunity to cash in on their investments. Those who have already secured properties can capitalise on rising market values, potentially earning substantial profits.
For the prices to stabilise, Sri Lanka needs to address surging demand by increasing the housing supply. However, the economic contraction has caused many development projects to be temporarily abandoned due to lack of investment, scarcity of raw materials, shortage of skilled staff, and inflated construction costs.
