If investors, or home-buyers, are looking for luxury properties in Sri Lanka, the immediately choice would be Colombo, since a great deal of luxury projects, such as Altair, Clearpoint Residencies and Avic Astoria, are already underway in the city centre.
There is no doubt that mid-range housing projects are in high demand in the suburban areas of the country, specifically in Malabe, Wattala, Ja-Ela, Panadura and Moratuwa. However, not many luxury houses and/or condominiums have been constructed in the suburban areas of Sri Lanka yet.
Granted, the demand for such projects has not been officially established yet. Nonetheless, opportunities for; buyers who intend to buy second homes; expats who plan to buy luxurious homes in their hometown and investors who rent out for tourists and locals for a short term are a niche market, which has not been harvested so far.
A luxury condominium in Colombo would cost more than Rs. 30 million due to increased land prices and demand within the city. Building the same condominium in the suburbs or much less developed cities such as Kandy, Jaffna or Polonnaruwa would cost much less. This would consequently lead to a much cheaper selling price. Buyers who intend to purchase a home in a city outside of Colombo would be interested in purchasing a lavish condominium for a slightly higher price than a mid-range home.
On the other hand, tourism and expat arrivals have increased quite extensively over the years. With much lower expenses compared to other nations, Sri Lanka can be considered a long term stay travel destination. Expats and tourists, who visit the pearl of the Indian Ocean, as Sri Lanka was once called, intend on visiting the wilderness and historical sites. This creates an opportunity for homeowners to rent out their luxury homes to attain a second source of income.
Expats who left the country for better work opportunities and the diaspora have been anticipating coming back to Sri Lanka. These expats may not be interested in purchasing a luxurious home which is expensive and away from their hometown.
Hugh van der Kolff, Managing Director of Lamudi Sri Lanka said: “Luxury projects in such areas could provide a better return on investment in the near future because we noticed several infrastructure development plans by the government lately. Specifically, the expressway to Kandy and Kurunegala, Monorail and circular ring road in Malabe and the intention of making Polonnaruwa a metro city. These developments could raise the value of luxury projects in the long run.”