Sri Lanka’s property market, which has faced challenges such as regulatory hurdles, economic instability, and rising construction costs, is expected to flourish in the coming years, according to the country’s leading real estate developer.
“We are witnessing an improvement in the property market. Interest rates have stabilized to some extent. Housing loan rates, which were over 20% a few years ago, have now dropped to around 12%. Additionally, low returns from fixed income instruments like deposits are driving people toward real estate and other investments,” said Nadeem Shums, Head of Sales and Marketing at John Keells Properties (JKP) and Vice President of the John Keells Group.
Shums noted that the overall economy has stabilized, providing a positive outlook for the property market. “Demand is emerging across all segments, from lower to middle and higher-income groups. There’s strong traction, and we anticipate this trend to continue, especially with public confidence in the new government’s stability. Over the next few years, we expect the property market to undergo a significant transformation,” he said during an announcement of a partnership between JKP and Union Bank for the “Zero-Down” homeownership plan tied to the ‘Viman Ja-Ela’ housing project.
Under the “Zero-Down” plan, Union Bank will finance 75% of the housing project costs upfront as a home loan, disbursed in stages. Customers will pay only the monthly loan installment during the project period, with the remaining 25% equity payment due to JKP upon project completion in approximately two years.
“This initiative, pioneered by Union Bank, addresses the barriers to homeownership caused by upfront costs. It also caters to the growing demand for flexible and affordable housing loan options, especially among young professionals and families,” Shums explained.
He added that the plan is also aimed at attracting Sri Lankan expatriates, particularly those in the Middle East, who make up a significant portion of their buyers. “This scheme offers accessible housing in prime locations, making it an attractive option for expatriates seeking property in Sri Lanka,” Shums concluded.