Demand for condominiums defies COVID pandemic 

• Completed condos have sold 92% of the units
• Ongoing single projects 50% and mixed developments 58%
• Majority of condominium buyers are Sri Lankan residents 
• Most preferred is single condominium project category and units worth below Rs. 25 m
• Insights from Condominium Property Volume Index  and survey of 23 condominium property developers

The condominium property has seen a significant increase in sales transactions in the country despite the COVID pandemic in the first quarter 2021 compared to the previous quarter, the Central Bank revealed citing a recent survey and specialised index compiled.

It said as per the Condominium Property Volume Index, the prevailing low-interest environment, as well as the increased supply of comparatively affordable condominium projects beyond the city limits of Colombo have led to the increased number of transactions during the period. 

This market analysis is based on the Condominium Market Survey conducted by the CBSL and 23 condominium property developers participated in this survey round. The Condominium Property Volume Index is compiled to capture the variations in market activities by way of number of sales transactions reported for the reference period. The base period is Q3 2017 = 100.

CBSL said the most preferred condominium units remain to be in the single condominium project category and below Rs. 25 million. 

With respect to the sales status in completed condominium projects as at the end of Q1 2021, 92% of the units have been sold. 

In the ongoing condominium projects, 50% and 58% of units have been reserved so far in single condominium projects and mixed development projects, respectively. 

CBSL said funding requirements of developers have been predominantly met through pre-sale deposits, bank loans and equity in similar proportions, by the end of Q1 2021. 

“These averages were calculated to get an overall understanding about the funding structure of condominium developments using the percentages of funds received through different funding sources provided by each developer,” CBSL added.

It also said the majority of condominium buyers are Sri Lankan residents, and the residence status of buyers remains largely unchanged from historic data. 

In terms of the purpose of purchasing, the majority of purchases remain to be for immediate living, while a noteworthy increase could be observed in condominium purchases for investments in Q1 2021. “Even though the prime source of funding used for purchasing condominium properties has been own funds, the percentage of buyers who have purchased condominiums through bank loans has increased during Q1 2021, the CBSL added.