Condo demand easing

The growth in sales of condominiums has slowed down this year in comparison to the last two years due to increasing unrest in the North and the East as well as an economic slowdown, according to stock market analysts.

“The rising interest rates are (also) making it difficult for both the buyers and the sellers,” a stock market analyst remarked.
“Despite condominiums and apartments being bought by people trying to leverage their income, with the growing interest rates, the demand has definitely fallen,” he added.

A real estate analyst said there is a lot of supply, but the demand has decreased. “The developers funding their projects with debt will get squeezed a lot,” he said.

According to analysts, the market for housing finance has grown enormously over the last two decades, while real estate represents perhaps the largest asset class of any country and is the largest source of wealth for families.

A report by Bartlett Mallory Stock brokers said that the emergence of new players in the housing finance business such as commercial banks and other financial institutions has created a vibrant scenario in lending, with more options available to the consumer.

“The demand for houses has reached great heights over the last few years with the peace initiatives assisting in a big way. The consistent growth within the economy coupled with strong potential to grow on the back of peaceful environment would auger well for a robust growth in demand for luxury condominiums in the heart of Colombo

Currently the Sri Lankan population is growing at a pace of 1.1% per annum indicating a vacuum in houses up to 100,000 a year,” the report said.