COVID-19 pandemic and Sri Lanka’s real estate market
by admin on April 13, 2020
Sri Lanka’s real estate sector has been dealt a crippling blow by the COVID-19 pandemic. Almost all the main construction sites in the country suspended work for nearly two months and dark clouds were seen gathering around the once booming industry. But with the gradual lifting of coronavirus-induced lockdowns, the industry recommenced its work with new vigor despite the uncertainties on the horizon, making the construction sites humming again. It appears that the industry’s positivity is set to pay off particularly with the homeowner market segment displaying renewed interest.
According to Condominium Developers Association of Sri Lanka (CDASL) President Suresh Rajendra, this was due to the homeowner market perceiving the property and real estate as a steady and a relatively low risk investment option. But affordability is set to play a key role in maintaining this momentum in the post-COVID environment where income streams of people have been affected. However, the industry is of the view that foreign interest for Sri Lankan real estate will take some time to recover. Foreign buyer segment, largely consisting of Sri Lanka expatriates, has always been an active market segment in the local real estate scene.
The industry believes that they should be encouraged more by offering incentives to ensure their swift return. A number of real estate developers the Seashells team talked to were of the opinion that policy makers should look to immediately address this need by implementing favorable policies for non-Sri Lankans and non-residents to purchase local real estate while luring them with additional incentives such as offering resident visas.
Meanwhile, normally in an economic recession, everything tends to contract. Companies lay off staff, scale down operations and shrink their real estate footprint to reduce expenses on rent or lease. But what makes COVID-19 such a peculiar phenomenon is that it could push organizations in the opposite direction, as they will need more space per employee to comply with the instructions of health authorities to maintain the required physical distancing. This could certainly give a boost to Sri Lanka’s commercial real estate sphere in the post-COVID era.
