Covid-19 Impact on real estate market in Colombo

Covid-19 Impact on real estate market in Colombo

The first COVID-19 patient in Sri Lanka was reported in January 2020. The second patient was diagnosed a few weeks later on March 10, and by the first week of May, there were 700+ patients. According to the World Health Organization, Sri Lanka is currently in the third stage of the spread of the virus. The Government of Sri Lanka, with the assistance of the country’s Armed Forces and Health Officers, is taking a number of proactive measures to control the spread of the virus. To control the spread of COVID-19, an island-wide curfew was imposed to encourage social isolation. Many economic activities have been halted due to the lockdown, and service-oriented industries are operating as remotely as possible. At present, the situation is returning to normal.

Housing and land prices in Colombo and Sri Lanka remained stable between the first two quarters of 2020. Prices for apartments went up in early 2018 but fell in 2019 and have not shown a significant change in the last 3 quarters. A comparison between land prices in the first quarters of 2019 and 2020 showed that there was an increase in the Western Province before the spread of COVID-19 in March. In the first quarter of 2020, the overall price per perch in the Western Province increased. But prices around Colombo showed a decline during that period. However, there has been a slight increase in the outlying suburbs beyond Colombo. The reason for this conflicting price nature is usually the result of affordable real estate sales in the suburbs.

It also shows that Google is increasingly searching for properties with lockdown and post-lockdown. These were especially for properties in Kandy, Dehiwala, Nugegoda, and Negombo. With repatriation taking place at the same time, the demand for properties in the suburbs is expected to rise further in the future. Overall, in Sri Lanka, the average price per perch in the first quarter of this year was 28%. This figure is likely to rise further in the future as the country slows down and works for development during the COVID-19 period.

The epidemic has certainly brought many negatives to countries around the world, but Sri Lanka’s proactive strategies have managed to avert its adverse effects. This is due to the country’s ability to maintain a stable real estate market despite the spread of the virus.

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