COVID 19 has been a disaster for many economies globally. This frightening pandemic has had several effects on the economy of Sri Lanka, namely real estate, and according to research real estate has been somewhat reshaped due to COVID 19.
Extensive research proves that by 2019, the beautiful city of Colombo experienced a huge increase in the value of the real estate, however, now that COVID 19 has taken its disruptive tole what is the impact that the real estate sector in Colombo is now faced with?
The real estate sector in many countries worldwide has taken a huge knock, however, the real estate value of apartments in Colombo has not changed drastically in comparison to many other countries such as the UK. Although many other sectors such as tourism, were dangerously affected by COVID 19, the general price of a property is still keeping at a steady level.
It may surprise many, but real estate has seen a distinctive spike in the interest many potential buyers have. These apartments have an elegant, modernized look which is impossible to ignore! Research has shown that this spike started in June 2020 and is still continuing with many buyers looking for new homes.
Although the value in real estate property has remained partly steady and there is real interest research reveals that when it comes down to actually making a purchase – this process has been stalled. The main reason for this is mainly because the overflow of new, prestigious apartments being built is much higher than the rate of interested buyers. The new apartments are also more in the price range for wealthy buyers, leaving many people unable to afford the property.
Reduced Land Value
During this pandemic, unfortunately, the western province was faced with a minor reduction of up to 2% per perch, which is not very high, yet still has an impact on the real estate growth. The outer suburbs, however, did not face this same decline at all, instead had an average growth of 21% per perch. The main cause of this big difference is that many people prefer to live in a suburb rather than a bustling city as well as the general price for land in places Colombo seems to be more costly for potential buyers.