REAL ESTATE SECTOR
Manjarie Tissera
PROPERTY MARKET OUTLOOK
Real estate is being reshaped by emerging trends and lifestyle preferences
Top three trends shaping real estate development
Convenient, affordable and safe housing; strategically located land for long-term value; and income generating properties, ideally earning foreign currency.
Shifts in residential and commercial property demand in the past year
Both residential and commercial demand is rising; and depending on their budget, people may opt to lease or rent rather than purchase property.
Rise in vertical developments across urban areas
As urbanisation accelerates, residential and commercial demand will continue to grow – this will require strong facility management and clear regulations, to maintain safety, cleanliness and long-term viability.
Real estate sector adaptations to changing lifestyle preferences
Space requirements are influenced by dual income households, vehicles, pets, remote work and visiting staff, calling for designs that reflect local culture and usage as foreign architects without resident insights often create impractical spaces that miss potential value.
Sustainability of new real estate projects
Maintaining business and reputation requires a long-term sustainability model across financial, ethical and environmental practices, focussing on genuine impact over marketing driven checklist goals.
Recent shifts in investor confidence
Real estate investments are rising, driven by first movers willing to take risks in challenging times, as evident in post-tsunami beachfront purchases with investors recognising long-term generational returns.
Prevailing sentiment among foreign investors
Foreign investors assess a country’s ratings much like stock market investments – improving this outlook and promoting Sri Lanka as a secure destination will attract more investment, while ensuring that expat property acquisitions comply with legal terms to bolster investor confidence and returns.
Impact of rising construction costs on project feasibility
Real estate development faces challenges from planning to construction with floor plan based sales risking negative perceptions amid price hikes, making effective cash flow and inventory management essential.
Regulatory hurdles facing developers
The approval process remains the main obstacle as authorities focus on procedural compliance while overlooking illegal and unlicensed developments, instead of recognising how well-planned projects can foster thriving ecosystems.
Impact of interest rates on buyer behaviour
Lower interest rates drive real estate sales by increasing demand for home and business loans while stock market investments generate profits or dividends that often flow into property, fuelling personal and commercial growth.
Mixed use developments in Sri Lanka
They will continue to grow as people seek affordability, convenience, activities and safety.
Regions seeing high real estate activity outside Colombo
High growth areas such as Kurunegala and the southern coast provide affordable, low risk, long-term investment opportunities.
Raw material availability on project timelines
While pricing has replaced availability as the main challenge, adapting to new costs has uncovered exceptional local materials and craftsmanship.
Smart home features in new developments
The real need extends beyond smart homes to well planned, energy efficient spaces designed with ergonomic tools offering user-friendly, open and peaceful living experience.
Impact of the digital economy on commercial real estate
Demand has shifted from traditional retail and offices to flexible workspaces, logistics hubs and tech enabled properties, driving the rise of smart buildings and data driven investments.
Trajectory of land prices in key regions
Land prices are rising at different rates with high prices but low transactions in Colombo and southern beachfronts, driving demand for affordable and attractive beachside properties.
Influence of urban planning on long-term growth
It serves as a master plan, helping developers navigate zoning, population and traffic, while utilising tools to assess the impact of highways, pipelines and projects on the real estate market.
Rise in joint ventures or consolidated developments
Joint ventures streamline costs and timelines with profit sharing partnerships proving more efficient than outright sales, while strategic alliances and multi branding enhance sales through combined brand value.
Influence of remote work on residential property
The demand for longer stays in tourist centric areas has increased the emphasis on travel convenience, F&B options, Wi-Fi and safety.
Trends in luxury real estate
High net worth investors are shifting towards return driven investments in prime locations, diversifying across multiple areas with residential assets that can double as rental or commercial spaces when unoccupied.
