Demand for condominiums drops, individual houses increases

by Jayampathy JAYASINGHE

Sri Lanka's real estate market is poised for a substantial growth following peace in the country. The property market has shown an upwards trend with interest shown by both expatriates, foreigners and local companies to invest in luxury resorts and other hotel and housing projects in the North Western, Eastern and the Northern provinces, according to surveys done by several Property Development companies.

A condominium in Colombo

However a slump in the condominium market has been noticed following peace in the country and the reluctance of the expatriate community to dump huge sums of monies for the purchase of condominiums.

The reason being that expatriates who lived abroad for several years are gradually returning to their native villages in the North and the East. Unlike in the past these expatriates have realised that it is cheaper to provide shelter to their kith and kin in their native villages especially in the North than investing in condominiums.

However, some condominium developers say that business is as usual and the enthusiasm among expatriates and the public has not waned.

The `Sunday Observer' spoke to Vajira Homes, a Property Developer who said the demand for individual houses has increased following peace in the country. "The demand for building individual houses has risen by 25- 35 percent during this year alone.

There is a housing boom in the Northern and the Eastern provinces.

The demand for condominium apartments in the city and elsewhere has dropped drastically because of the exorbitant prices', a spokesman for the company said.

Kelsey Homes (Pvt) Ltd specialised in developing exclusive housing projects and building homes on private land said the demand for building houses has increased. "The enthusiasm shown by the public with regard to housing has increased. We have had several inquiries regarding housing projects, said Kelsey Homes Spokesperson Dilkushi Jayawardena when contacted by the `Sunday Observer'.

According to the Central Bank, annual report: "The demand for houses and urban infrastructure is expanding rapidly with the population growth and urbanisation." The report goes on to say, the "Private sector continued to play a vital role in the housing sector. There is a "shortage of 350,000" housing units in the city." According to a random survey conducted in Colombo in 2006 the demand for land in the following areas is as follows (1) A perch at Kirulepone Rs. 1,000,000 . (2) A perch at Borella Rs 2,000,800. (3)A perch at Pagoda Nugegoda Rs 900,000.

The reason for the increase of prices was due to the high population density in the areas.

According to a survey more than 50% of condominiums in Colombo are owned by Sri Lankan expatriates living in the USA, UK, Australia, Canada and other European and Middle Eastern countries.

The prices in the city's housing market have appreciated steadily over the years and proved to be a lucrative investment.

Property Developers say the market is currently booming following the conclusion of the civil war.

Despite the earlier setback, property market, including several condominium projects are doing business as usual and has registered no tangible drop in demand.