Sri Lanka’s property market slowing after the boom
Sri Lanka’s property market is slowing, after an exceptional year. The previous year the property market surged due to the 'peace dividend', optimism about Sri Lanka's prospects, high volatility in precious metals during 2Q13, and expectations about the Commonwealth meeting (which was held in November 2013), all of which triggered an escalation of property prices in 2Q and 3Q13. The Sri Lankan equity market small size and high volatility has also tended to divert funds towards real estate market.
Booming tourism and strong domestic demand have pushed Sri Lanka's GDP growth up to 7.3% in 2013, from 6.3% in 2012. Sri Lanka also invested heavily in infrastructure, such as improved transport networks, telecommunications, and electricity generation, so that the construction sector increased its share of Sri Lankan GDP from 7.6% in 2009 to 10.3% in 2013.
