Sri Lanka could be facing a future of oversupply in the high-end home sector. Industry analyst Oxford Business Group examined the state of luxury residential development in the South Asian nation and found that, barring an uptick in demand, Sri Lanka could be facing market saturation by 2018 or 2019. The publication spoke with Pravir Samarasinghe, the developer behind Havelock City, a mixed-use development in Colombo, about the potential future of the luxury market.
Though sales are steady, the increase in the supply of top-end residential units in the capital could outstrip existing demand. “In the premium residential segment, insufficient demand will be a problem,” Pravir Samarasinghe, CEO of Overseas Realty (Ceylon) – the company developing Havelock City – told OBG. “There is a maximum offtake of 500 units a year in Colombo, and there are probably 3500 under construction over the next three years.”
Developers hope the demand issue will be mitigated by two factors: Improving economic and political conditions that will encourage more international investment, and the return of wealthy Sri Lankans to urban centers as more upscale accommodations become available. [Oxford Business Group]