ECONOMYNEXT – Sales of high-prices condominium apartments in Sri Lanka have been slowing down while the cheapest ones continue to remain in demand, the central bank said.
Sales were still concentrated in the Colombo District with the majority of units sold belonging to single condominium projects, according to a ‘Condominium Market Survey’ done by the banking regulator.
“According to the analysis of the composition of sales transactions, the share of the category of condominiums priced below 25 million rupees shows an increase, while the shares of other categories have declined,” the bank said in its annual report for 2018.
It showed that sales of apartments priced between 25 and 50 million rupees, those over 50 million rupees and also over 75 million rupees each all slowed down during the year.
According to information provided by property developers, the number of sales transactions reported per quarter remained relatively stable except for the first quarter of 2018, when transactions increased substantially.
This was due to a possible price rise with effect from 1st April, 2018 given the budget proposal to impose 15 per cent Value Added Tax (VAT) on condominium sales, which was later postponed by one year.
The central bank survey found that funds for condominium developments were mainly generated through bank loans, pre-sale deposits and equity.
“The majority of the condominium buyers were resident Sri Lankans and most of them have purchased condominium units for living rather than investment,” the report said. “The majority of buyers have purchased condominium units using their own funds.”
(COLOMBO, May 13, 2019)