Bottom Dwellers

Sri Lanka's Prime Minister Ranil Wickremesinghe arrives with flowers to receive blessings at the Gangaramaya Buddhist Temple, Colombo, Sri Lanka on Wednesday 4 April 2018. On wednesday (4), Wickremesinghe survived a no-confidence motion in the Sri Lankan parliament with a 46 vote majority after a 12-hour debate with 122 MPs voted in his support while 76 MPs voting to remove the prime minister. (Photo by Tharaka Basnayaka/NurPhoto via Getty Images)

Feb 21, 2008 (LBO) – The market for high rise apartments in Sri Lanka has bottomed out and prices are unlikely to fall further, a group of property developers and construction contractors said. Economic analysts have pointed out that Sri Lanka’s recent rise in land and property was an asset price bubble fired loose monetary policy and negative real interest rates. A similar bubble in the United States, caused the so-called sub-prime market turmoil. Construction costs and prices of apartments can only increase in future because of increasing costs of raw materials, skilled labour, land and utilities, they said.

The market for high rise apartments in the island has slumped in recent months when demand collapsed with the escalation in hostilities between the Tamil Tigers and government forces and oversupply caused by a construction boom.

Ranjith Gunatilleke, managing director of construction firm Sanken Lanka, said they have been involved in the local construction industry for over 25 years and during the last five years in particular saw a boom in the housing industry.

“Recently, however, some developers have been unable to meet their payments to contractors as they are unable to se