Builders urging state support for affordable housing
View(s):South Asian property developer, Iconic Developments (Pvt) Ltd is calling for state support for cheaper housing catering to middle and lower income segments.
“The government should incentivise those who want to get into this sector,” Rohan Parikh, Managing Director, Iconic Developments told the Business times.
The company is eyeing affordable housing sector and Mr. Parikh said that Sri Lanka has the most extensive of duty structures. “Due to this, the cost for builders has increased.”
He said that particularly as a result of revisions to Government policy over the past year, including the removal of tax concessions for real-estate development, newer entrants into the apartment development industry will find it difficult to compete with established players who were able to open properties in the recent past. “In that regard, we anticipate an impending contraction in supply and an increase in demand, meaning that the market’s best window for investment into the real-estate sector would be within the next three year horizon.”
He added that the new duty structure has increased builders; costs by 30 per cent. “This is because the duty free status for builders was withdrawn from this year.”
Reiterating confidence in the growth outlook of the Sri Lankan real-estate sector following recent concerns as to the pace for growth in the sector, Mr. Parikh said that on the global stage, Sri Lanka’s international profile is one on the rise. “The unprecedented boom in the tourist sector is in many ways a short-term indicator of the country’s long term potential. Over the coming years, people will continue to be drawn to Sri Lanka, not just to visit, but also to live and work in a booming economy,” he said,
Particularly in the context of major parallel infrastructure developments such as the Western Region Megapolis and the Colombo International Finance City, real-estate sector, development would have to be carried out at a rapid pace to match growing demand, he noted.
“In that regard, the approach towards investments and development must factor in the needs of the medium-long term. Hence our goals as a property developer are there in alignment with this vision for Sri Lanka and we are confident that it can be realised. Naturally regulation and prudent management of investments and risk will be crucial to success hence we hope to do our part to extend and deepen dialogue between stakeholder groups and the Government with a view to achieving a viable, mutually beneficial outcome,” Mr. Parikh stated. (DEC)