Lanka’s property market set to thrive
View(s):In recent years, Sri Lanka’s property market has been booming with greater demand for luxury properties. According to a media release by Lamudi, a global property portal focusing exclusively on emerging markets, housing prices in many provinces are increasing, especially in the Northern Province where a 23.47 per cent increase was reported in the Global Property Guide for Sri Lanka. Other provinces where house prices are on the rise include the Central, Sabaragamuwa, Western, Southern and North West provinces. Although there is a lot of emphasis on luxury property in real estate journals, more affordable property is coming into the market as Sri Lanka becomes more of a middle income country.
Quoting KPMG (the audit firm), the media release stated that a super luxury condo would cost an average of US$308 per square foot, a luxury condo would cost an average of $93 per square foot and a semi-luxury condo would cost an average of $39 per square foot. Back in 2015, Lamudi said the government’s removal of the land lease tax was a good move in boosting foreign investments. A report from government website news.lk said that while laws previously banned foreigners from owning property and penalised non-nationals who rent with higher taxes, the new government is more encouraging. This move will make investing in Sri Lanka’s real estate sector much more appealing and as a result, the demand for property in smaller cities will grow. Properties are not only sought after in Colombo with Kandy now becoming much more popular.
In addition, the range of property prices is diversifying, with the country gradually becoming more accessible to middle-income families, especially when it comes to purchasing land or property in less well-known towns or cities, the media release stated. Another factor that will help the real estate sector later in 2016 is Minister of Finance Ravi Karunanayake’s decision to reduce levies on accommodation in the travel industry. This will assist landlords in the country who are providing tourists with short term lets and could encourage buy-to-let investors. The economy will also grow as a whole due to a stronger tourism industry. Infrastructure development and laws encouraging Foreign Direct Investment (FDI) will be the main contributing factors to a strong second half of 2016. -(NG)