Acute shortage of housing, luxury apartments by next year?

Sri Lanka is likely to face an acute shortage of housing and luxury apartment units by next year and the future of the construction industry looks bleak, Nalin Herath, Chairman and Managing Director -Home Lands said.

He said, overall there are about 3,000-4000 housing units under construction as of now.

“With the completion of these units hopefully by the end of this year, we will not see any single housing or luxury apartment development project taking place in the country. As a result Sri Lanka will witness a shortage of housing units and luxury apartments by next year.”

Sri Lanka’s construction sector in particular luxury apartment developers face numerous challenges due to certain import restrictions imposed on sanitaryware accessories, aluminum and rising global prices of steel and copper. These factors are putting a strain on the construction of housing and apartment units in a big way.

“To redress these issues, we have put forward several recommendations, requesting the Government to arrange for us (industry) a credit line from India or China to import raw materials that are required to develop housing units in Sri Lanka. And if a solution to this is not found many companies will not be able to complete their ongoing projects or embark on new projects in the near future.”

Moreover, higher cost of production triggered by import restrictions have also resulted in apartment prices soaring by 50-60 %. Land prices in Colombo and suburbs have also increased in a big way. Herath said further that despite local banks having announced higher rates for deposits and savings, people have lost faith in the banking sector as the ongoing economic crisis deepens and as a result people still tend to purchase residential plots, housing units as a future investment method.