In a significant stride towards fostering transparency and informed decision-making within South Asia's real estate landscape, the Research Intelligence Unit (RIUNIT) unveiled a series of reports during the 8th Islamic Finance Forum of South Asia, held on recently at the Shangri-La hotel in Colombo.
These reports provide a holistic view of the real estate markets in Sri Lanka, Maldives, and Bangladesh, shedding light on key facets including apartment supply, pricing trends, rental values, and absorption rates.
Among the three nations under scrutiny, Bangladesh emerged as the leader in terms of the sheer volume of apartment supply. Notably, the country recorded the highest number of apartment units available. However, it is noteworthy that the Apartment/Population ratio in Bangladesh stands at 0.09%, highlighting the vast potential for growth in this sector.
Sri Lanka, with 28,273 apartment units, presented an Apartment/Population ratio of 0.13%, reflecting a substantial supply to meet the growing demand. Maldives, on the other hand, demonstrated a lower number of units (5,204), yet remarkably, the highest Apartment/Population ratio of 0.92%.
Maldives stood out with the highest apartment prices, primarily due to robust demand within the capital city of Male, coupled with modern apartment projects in Hulhumale commanding premium rates. In contrast, Sri Lanka faced challenges, particularly concerning currency depreciation and economic instability at the onset of 2022, which adversely affected apartment prices. On a more positive note, Bangladesh's average apartment market showed a steady 7% annual increment in prices.
In regards to the rental market, Sri Lanka experienced a 2% decline in apartment rental values when measured in USD, primarily due to currency depreciation. Meanwhile, Maldives showcased the highest apartment rental values, marked by a 3% annual increment. Surprisingly, Dhaka in Bangladesh recorded the lowest rental values but saw a 4% increment compared to the previous year.
Sri Lanka, driven by a slowdown in new apartment supply since 2021, indicated a higher absorption rate. The old inventory nearly sold out, with few unsold units in ongoing projects. Conversely, Maldives displayed a lower absorption rate, primarily due to a substantial influx of new apartment projects, particularly in Hulhumale. RIUNIT's findings suggest that Dhaka has effectively maintained equilibrium between apartment demand and supply in recent years, highlighting the maturity of the real estate market in Bangladesh's capital.
The Research Intelligence Unit (RIUNIT), a British company with its Asia head office based in Colombo since 2003, has been committed to addressing strategic weaknesses and vision constraints that have hindered growth in developing countries, local governments, and institutions worldwide. Specialising in real estate research and policy advisory, RIUNIT has played a pivotal role in carrying out investment appraisal studies, feasibility studies, and market research assessments for major development projects in the South Asian Region. Its unwavering dedication to providing accurate, data-driven insights has made RIUNIT a trusted name in the realm of real estate analysis.
The comprehensive reports released by RIUNIT serve as an invaluable resource for stakeholders in South Asia's real estate sector, offering a clearer understanding of market dynamics, which is essential for informed decision-making in this ever-evolving landscape.