Sri Lanka luxury apartments sales may slow: Jones Lang Lasalle
ECONOMYNEXT – Sri Lanka’s pipeline of luxury apartments in Colombo is at a historic high which may make it more difficult for them to be sold quickly, Jones Lang LaSalle, a real estate consultancy said.
In Sri Lanka 75 percent of apartments are bought by investors and only 25 percent by end-user who occupy them, Gagan Singh, CEO – Business India and Chairperson Sri Lanka Operations told reporters in Colombo.
"There is as large supply of luxury apartments," she said.
"With the large supply, the concern we have is that there enough money for investment to soak up the supply that is coming at the same speed that developers are used to."
There are several high-profile mixed use projects in the pipeline, involving Sri Lankan and international players.
"We have no doubt that it will get purchased, but in the past the supply was lees and the pick-up was quicker. And that is the only concern.
"But in the long term it will all get picked up."
Sri Lanka’s interest rates are a historic low and the budget deficit is high and the central bank is printing money to finance it.
Some analysts fear that the central bank may fire another property bubble like it did in the 2004-2009 period, which led to the collapse of many finance and property companies in 2008-2009 as well as apartment projects involving domestic developers.