Sri Lanka middle-class housing boom to benefit construction business
ECONOMYNEXT – Sri Lankan construction companies can expect growth to be sustained by an anticipated boom in middle class housing to meet pent up demand, a senior urban planning official said.
“Sri Lanka as a country is looking at a well-planned roll out of development,” said Nayana Mawilmada, director general of the Urban Development Authority (UDA).
“We plan to get all agencies together on one page,” he told a forum on the construction sector held by Asia Securities which will present a new report on the sector today.
“Most of this transition will be underpinned by the private sector. You can expect a dramatic uptake by the private sector – the entire government machinery is being formulated to stimulate this,” Mawilmada said.
Sri Lanka’s housing market is starting to see a shift and the government too has a clear mission to look at improving housing.
“We are still a single family detached housing country,” Mawilmada said.
But with increasing constraints on land, increasing population density and land prices going up, the island is starting to see the conversion from single family to multi-family living in apartment blocks.
The country will also see higher demand for higher quality housing which means new housing, as personal incomes improve.
So far the government through agencies like the UDA has focused on low income housing while private sector developers have invested in the high-end market which has a lot of supply.
“The middle end has been ignored,” Mawilmada said. “This is where this transition happens.”
The government is looking at intervention in two ends – to free up the land market and to intervene in the housing finance market.
Mortgage finance accounts for only five percent of GDP in Sri Lanka, a “dismal figure” compared with other countries, Mawilmada said. (Colombo/November 03 2015)