WHY IS NOW A GOOD TIME TO INVEST IN THE PROPERTY MARKET OF SRI LANKA?
As 2018 is gradually coming to an end, the developments that happened within the year has clearly suggested that this is the perfect time to invest in Sri Lanka’s property market, as the demand for both residential and commercial properties are predicted to rise within the next few years. Sri Lanka is now a Middle Income Country according to the IMF and the country is expected to reach the 12,000 USD GDP per capita PPP mark by the end of 2018. As a result, financial activities has seen a rapid growth, resulting in a higher demand for commercial properties in major urban areas of the island. Hence, check out below to understand why this is a good time for both local and foreign investors, to invest in the property market of Sri Lanka.
1) Growing economy and real estate market
Sri Lanka has experienced an impressive level of economic growth for the past decade since the civil war ended in 2009. The country experienced a GDP growth that exceeded 7% per annum in certain years, while the construction industry saw double-digit growth, at around 10.3% of the GDP back in 2013. International hospitality service providers, such as Shangri-La, Moevenpick, and many other luxury hotel chains demonstrated their confidence in the country’s economic potential, by investing billions of dollars into developing infrastructure for Sri Lanka’s growing tourism industry. Furthermore, the IT/outsourcing industry has also shown a boom, which in term has contributed to the pronounced demand seen for commercial properties, particularly for office spaces within the commercial capital of Sri Lanka.
2) Upcoming major infrastructure developments
A number of upcoming development projects are expected to revolutionise the country’s real estate landscape, adding more residential as well as commercial properties while improving transportation in major cities of Sri Lanka.
A. Colombo International Financial City (CIFC): Known formerly as the Colombo Port City, this new metropolis is a significant development project that will see the creation of a brand new financial zone, which is expected to bridge the gap between Singapore and Dubai. Built on 269-hectares of reclaimed land adjacent to the Colombo port, the CIFC project will see $13 billion of investments related to housing, healthcare facilities, educational facilities, marinas and commercial developments, adding more than 83,000 jobs over the next 30 years.
B. Colombo Light Rail Transit System: Spanning roughly a 16 km distance, the Colombo Light Rail Transit System will connect the IT Park in Malabe with the Colombo Fort Railway Station, reducing the total travel time to less than 30 minutes between the two locations. It will solely be powered using electricity and will cost an estimated $1.7 Billion upon its completion in 2024. The project is expected to reduce the traffic congestion in Colombo, which could in term indirectly boost the demand for properties in the suburban areas of the city.
3) The booming luxury property market
The demand for luxury properties, such as high-end condominiums and apartments, especially within some of Sri Lanka’s major cities such as Colombo, Kandy, Galle, Kurunegala, and Negombo as well as Jaffna is expected to see a sharp rise, largely thanks to high net worth Sri Lankan citizens and Sri Lankan expats who are looking to cash in their hard-earned wealth. As a result, the value of such properties is also expected to skyrocket, offering a much higher ROI for those who invested in the country’s real estate market.
Moreover, real estate experts estimate that up to 5000 luxury residential property units would be added to Sri Lanka’s high-end property market by 2020 with the supply climaxing within this year (2018) when 2800 property units are slated for completion. Above all, the interest from foreign buyers for the country’s luxury residential projects is predicted to further increase the demand.
Therefore, those who are thinking of investing in Sri Lanka’s real estate market should consider now as the best time to start searching for a new property, either as a residential or as a commercial investment.