The Investor Sentiment - Equity and investments forum for Sri Lankans
Search
 
 

Display results as :
 


Rechercher Advanced Search

Latest topics
» Thread for News on Local and Foreign Politics
Today at 8:15 am by ruwan326

» Thread for News on CSE and SL Economy
Today at 6:28 am by nihal123

» Dividend Announcement
Today at 6:04 am by nihal123

» COMB.N0000 ( COMMERCIAL BANK OF CEYLON PLC )
Yesterday at 9:20 pm by pjrngroup

» Thread for News on International Markets
Yesterday at 7:56 am by The Invisible

» DIPD.N0000 (Dipped Products)
Yesterday at 7:18 am by The Invisible

» SAMP.N0000 (SAMPATH BANK PLC)
Yesterday at 7:16 am by The Invisible

» TAFL - Three Acre Farms
Yesterday at 7:14 am by The Invisible

» RCL - Royal Ceramics
Yesterday at 7:12 am by The Invisible

» HAYL.N0000 Hayleys PLC
Yesterday at 7:08 am by The Invisible

» Will YOU VOTE for ME if I run for SL PRESIDENCY?
Tue Nov 13, 2018 6:41 pm by Brave Heart

» How to trade Stock profitably?
Tue Nov 13, 2018 11:55 am by indramal

» What are investing methods in Sri Lanka?
Tue Nov 13, 2018 6:39 am by indramal

» අනං මනං! #/+?.<>
Mon Nov 12, 2018 7:57 pm by Yin-Yang

» Thread for General News Local/Foreign
Mon Nov 12, 2018 7:57 am by serene

» Anybody invest New York or Landon Stock Exchange?
Sat Nov 10, 2018 8:53 am by කිත්සිරි ද සිල්වා

» JKH.N0000
Fri Nov 09, 2018 10:49 am by ruwan326

» HAYC - Haycarb
Fri Nov 09, 2018 10:30 am by The Invisible

» WATA - Watawala
Fri Nov 09, 2018 10:22 am by The Invisible

» AAIC.N0000
Fri Nov 09, 2018 10:10 am by The Invisible

» Asian markets rally as investors see positive in US gridlock
Fri Nov 09, 2018 8:02 am by serene

» CSE RISE , RIDING ETHICALLY
Wed Nov 07, 2018 5:53 am by pjrngroup

» Constitutional Crisis – close to $ 100mn flees stock/bond markets last week
Tue Nov 06, 2018 6:38 pm by serene

» HHL.N0000 ( Hemas Holdings PLC)
Tue Nov 06, 2018 8:43 am by The Invisible

» Weldone Serene for 4000 + posts
Tue Nov 06, 2018 7:44 am by serene

» Real Estate Market in Sri Lanka- A booming Industry or a Bubble?
Tue Nov 06, 2018 7:36 am by serene

» Asiri Hospitals PLC - ASIR
Mon Nov 05, 2018 11:58 am by The Invisible

» Flying is the Safest mode of Transport
Sat Nov 03, 2018 8:44 am by කිත්සිරි ද සිල්වා

» REXP.N0000 ( RICHARD PIERIS EXPORTS PLC)
Fri Nov 02, 2018 7:45 pm by Brave Heart

» What MOTTOs/PRINCIPLEs do YOU follow in LIFE ?
Thu Nov 01, 2018 4:14 pm by Seyon

» LDEV - Lankem Developments
Thu Nov 01, 2018 2:23 pm by The Invisible

» NDB.N0000 (NATIONAL DEVELOPMENT BANK PLC)
Thu Nov 01, 2018 12:43 pm by The Invisible

» MTD Walkers (KAPI)
Thu Nov 01, 2018 11:54 am by The Invisible

» SERV - The Kingsbury
Thu Nov 01, 2018 10:12 am by The Invisible

» LFIN - LB Finance
Thu Nov 01, 2018 10:03 am by The Invisible

» PABC.N0000 (Pan Asia Banking Corporation PLC)
Thu Nov 01, 2018 9:56 am by The Invisible

» Sri Lanka jumps 11 places to 100th rank in World Bank’s Doing Business index
Thu Nov 01, 2018 9:52 am by The Invisible

» Banking Sector
Thu Nov 01, 2018 9:50 am by The Invisible

» All Share index crosses 6,000 points
Thu Nov 01, 2018 8:20 am by Brave Heart

» Asian Hotels and Properties September net down 48-pct
Thu Nov 01, 2018 8:17 am by Brave Heart

» Sri Lanka rupee weakens; stocks rally slows
Thu Nov 01, 2018 8:13 am by Brave Heart

» TJL.N0000 (Textured Jersey Lanka PLC.)
Wed Oct 31, 2018 7:27 pm by PANTOMATH

» Whats ailing Sri Lanka ? Why we are what we are!
Wed Oct 31, 2018 6:07 pm by Ethical Trader

» Sri Lankan rivals tempt defectors to swing crisis
Wed Oct 31, 2018 9:41 am by The Invisible

» Sri Lanka’s Piramal Glass in Sept quarter loss as costs rise
Wed Oct 31, 2018 9:36 am by The Invisible

» Sri Lanka President could dissolve parliament if interim budget is defeated: Wijedasa
Wed Oct 31, 2018 9:34 am by The Invisible

» Sri Lanka political crisis hikes debt rollover risk: Fitch
Wed Oct 31, 2018 9:31 am by The Invisible

» Sri Lankan political standoff could threaten reforms: S&P Ratings
Wed Oct 31, 2018 9:29 am by The Invisible

» Giant pro-democracy rally in Sri Lanka capital
Wed Oct 31, 2018 9:27 am by The Invisible

» Postponing reforms will make Sri Lanka lag behind peers, central bank warns
Wed Oct 31, 2018 9:22 am by The Invisible

November 2018
SunMonTueWedThuFriSat
    123
45678910
11121314151617
18192021222324
252627282930 

Calendar Calendar

Disclaimer


Information posted in this forum are entirely of the respective members' personal views. The views posted on this open online forum of contributors do not constitute a recommendation buy or sell. The site nor the connected parties will be responsible for the posts posted on the forum and will take best possible action to remove any unlawful or inappropriate posts.
All rights to articles of value authored by members posted on the forum belong to the respective authors. Re-using without the consent of the authors is prohibited. Due credit with links to original source should be given when quoting content from the forum.
This is an educational portal and not one that gives recommendations. Please obtain investment advises from a Registered Investment Advisor through a stock broker

Real Estate Market in Sri Lanka- A booming Industry or a Bubble?

Go down

Real Estate Market in Sri Lanka- A booming Industry or a Bubble?

Post by xmart on Sat Nov 03, 2018 6:09 pm

I have come across many real estates developments in all scale in Sri Lanka. Mainly, in Colombo. High-end apartment complex like Altair, AVIC Astoria, and Havelock City to UDA low-income housing complex in Maligawatta, Henamulla, Male Street etc. further, there are private investors who pull money from the equity market, FDs and other businesses in order to build the apartment complex for the purpose of short-term renting or permanent sale. further that, City center, Waterfront and Havelock city can be classified as mixed developments.

there are a lot of promises with the port city and related development will there be increased demand and resultantly increased capital appreciation? or this real estate boom is just another bubble where most of the retail investors end up with lifetime loans?
avatar
xmart
Top contributor
Top contributor

Posts : 637
Join date : 2015-01-17

Back to top Go down

Re: Real Estate Market in Sri Lanka- A booming Industry or a Bubble?

Post by puliyanam on Mon Nov 05, 2018 10:37 am

My views (not research) are as follows:

The supply of new premises in residential market has increased tremendously over last decade or so, especially with the increase in the apartment supply in the Colombo district. It has caught up in some other district too, though not as severely.

THe supply of new premises in commercial property market is now on the increase with city center and the like with the planned port city etc shifting gears on the definition of "up-market" property.

According to CBSL, the prices of land increase by 16% or so from 2017 June to 2018 June in Colombo district.

So what is happening is supply is increasing in terms of units, land prices are increasing and a huge construction effort is onging, predominantly in the colombo district. But other districts are gradually getting there.

So what? Occupancy (Yield and shift)

Well this trend could get derailed as follows

People who bought these for investment purposes or developers who developed without fully pre-selling are already witnessing some issues. THis could translated to lower yields going forward. Or know on impact on tourism sector. THat is what some times reffered to as bubble by CBSL (based on NPA's reported by banks by sector perhaps)

Shift to high end flashy properties from the current property which are old could start a price war, in commercial sector leading to me-too properties struggling with lower economic growth witnessed in many sectors.

Will it happen? When?
Honestly i dont know Very Happy. what we believe as a market is what matters. Different segments have different problems at present.

Residential
Low end: Low occupancy or shift doesnt seem an issue so ok in my view
Mid market: definitely an issue
High end: Issue is visible
Very high end (>450 USD/Sq.feet): hmm not sure. May be an issue.

Commercial: Definitely an issue

Will i invest in the sector?
Personally im a land person not appartment person. Land stock cannot be increased, not by much even if you take reclamation into account . And fixed supplies are good for prices, at least in the long run!


avatar
puliyanam
Top contributor
Top contributor

Posts : 354
Join date : 2014-02-28

Back to top Go down

Re: Real Estate Market in Sri Lanka- A booming Industry or a Bubble?

Post by slstock on Mon Nov 05, 2018 11:25 am

Hmm. I see someone is back (puliyanam ) .Good to see.

I want to add something on Foriegners moving to SL or buying/renting  property which may not be apparent or discussed by media.

Actually Sri Lanka is getting quite unattractive for foreigner to buy/rent property and settle down   ( even to visit but that is another matter)

Here are some reasons

1) Unless in rural areas , Condo / Property buy/rent prices in main cities ( specially in Colombo / Kandy ) is actually quite expensive.  Same can be had in Thailand ( and even Vietnam) for A fraction  where infrastructure facilities, health case, cost of living is much better.  

2) Most food items foreigners  are used to in their homelands are not freely available in SL. If they can be found ,   they are amazingly expensive due to high import taxes.  

Look how expensive Cheese is. ( Seriously I don't think cheese is a luxury. It is not Caviar!)  I heard even a small bag of M&M candy is over Rs 1000 in Sri Lanka now.  
It usually less than half price elsewhere in the world. How much are Grapes and Oranges ? Are these luxuries ? ( Are Grapes or eating Oranges ( Orange Orange)  grown in SL enough  to substitute with local products? )

3) Red tape and other tape is absurd in Sri Lanka.


Ex 1 : Some years ago , I knew an educated lady ( counselor) from England trying to settle down in SL. She once told me she was going through hell to get her resident visa renewed due to red tape in SL.  Look she was rich, educated , helping local people and owned property here,  yet SL policies were so complex she might have had to sell everything  and return to UK.

We are not UK or USA to get rid of such people. We attract few to start with and then ... ?

Ex 2 :  I was once at the Local Customs office to clear some books.  There was an Australian who was sitting there for ever and quite upset with something. Finally he left very unhappy.

Later I quietly talked to the Custom officer to find out what happened.   The Aussie had got shipped 3 bottles of tonic ( for one of his medical  needs) to SL.

Customs wanted to Charge him Rs 15000 to clear it.  
Actually the bottles costed only like Rs 5000 total ( tax was 2-3 times more)

The Sudda was honest and had asked to include the bill/receipt in the package. Customs officer was telling me  if he didn't have the bill in the package they could have put some low amount and let him go.

But now they have to tax him like crazy due to the receipt.  I politely told him  I felt not right about our system hassling the Sudda for over a small matter like such. Customs officer told me he felt the same but sadly he can't do anything and felt sorry too!  


In summary, I really think Sri Lankan Apartments/Condos are over prices in Colombo and main cities. Add to that with the hassle and lack of facilities  in SL,  am not surprised we will be in a property bubble if we are already not ( specially wrt to Suddas demand vs supply )

_________________
Never listen to anyone including myself without your own study. Only few truly genuine people exist in this world.
Please read : [You must be registered and logged in to see this link.]
---------
avatar
slstock
Veteran
Veteran

Posts : 5381
Join date : 2014-06-12

Back to top Go down

Re: Real Estate Market in Sri Lanka- A booming Industry or a Bubble?

Post by xmart on Mon Nov 05, 2018 2:30 pm

Thanks both puliyanam and SLS for wonderful insights.

Yes we agree that Condo market is overprices and land prices are skyrocketing. but with the rate of emerging supplies and demand, specially with prominent developments in Colombo i'm still doubtful that whether we had reached the peak or just witnessing the first spark of new trends.

both of your insights opened a path to think more. thanks!
avatar
xmart
Top contributor
Top contributor

Posts : 637
Join date : 2015-01-17

Back to top Go down

Re: Real Estate Market in Sri Lanka- A booming Industry or a Bubble?

Post by PANTOMATH on Mon Nov 05, 2018 9:44 pm

Very good discussion Puliyanam and SLS,thank you
+Rep for both of you
avatar
PANTOMATH

Posts : 97
Join date : 2018-10-15

Back to top Go down

Re: Real Estate Market in Sri Lanka- A booming Industry or a Bubble?

Post by serene on Tue Nov 06, 2018 7:36 am

Thanks Good discussion.
Bubble would be get inflated or deflated in near future when winner comes out from this ugly political tussle.

serene
Top contributor
Top contributor

Posts : 4059
Join date : 2014-02-26

Back to top Go down

Back to top


 
Permissions in this forum:
You cannot reply to topics in this forum