Sri Lanka property prices are consistently going up, while its government encourage inward foreign investment is this combination a mix for the next big global property hotspot?
Reports from Economynext.com show that Sri Lanka's central bank is keeping a watch on rising land prices in Colombo, Deputy Governor Nandalal Weerasinghe said, although there were no plans to place credit restrictions. Prices of real estate in Colombo have been rising over the past two years, and prices of apartments have also jumped.
"We are watching property prices in Colombo," Weerasinghe told EconomyNext.
Prices of real goods, imports and exports rise when the currency collapses or interest rates are low, and real estate is a hot button for regulators as it gives early warning.But when rates have been kept low for an extended period of time, the present value of assets such as land or buildings go up, generating asset price bubbles.Construction and real estate were among the largest consumers of credit in recent months, according to Central Bank analysis.
"Clearly those are growth sectors," Governor Coomaraswamy said. "Real estate
According to OxfordBusinessGroup.com The supply of luxury apartments in the commercial capital could reach 6000 units by 2018-19, according to a recent report by the Research Intelligence Unit (RIU), up from 783 in 2009 and 2657 this year. Several residential projects are expected to be completed in the years head, including John Keells Holdings’s $850m Cinnamon Life waterfront project, which is billed as the largest private sector investment in the country, according to the company’s website. The 4.5m-sq-foot integrated resort is scheduled for completion in 2018 and will include an 800-room hotel, apartment and office complexes, a convention centre and a shopping mall.
Colombo’s Havelock City mixed-use development is also expanding, investing some $130m to add another four residential towers and nearly 650 units. Other luxury residential projects, such as the Astoria luxury condominium development, two 194-metre Shangri La residential towers and the 240-metre Altair skyscraper, will further add to stock in the city.
Since the end of the war 7 years ago, Sri Lanka´s economy has boomed. GDP growth of 7% per annum has become normal. Construction has grown at a double-digit rates and was 10.3% of GDP in 2013. The IT/outsourcing industry is booming. Shangri-La, Moevenpick, and many other luxury hotels have opened.
Tourist arrivals have skyrocketed, rising by 133% from 2010 to 2014 with more than 1.5 million tourists visiting the country, a major improvement even over the 11.9% annual growth in tourism arrivals from 2000 to 2009. There has been significant spending on new infrastructure, and rising internal migration from the provinces into Colombo.
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Nick Marr is the founder of Homesgofast.com and behind property marketplace TheHouseShop.com and Europe's most established dedicated European property portal (online since 1998) Europeanproperty.com. Nick advised the UK government to help change legislation to make advertising real estate online easier for UK property businesses. The result has been a flourish of innovation creativity helping all stake-holders to greater flexibility allowing for new online models to exist today. Working with thousands of international real estate agents, developers and homeowners worldwide allows him to gain a unique insight to the changes in both digital marketing and the real estate sector. You can find out more about him at NickMarr.com