Sri Lanka property bubble on the bursting path

August 25, 2007 (LBO) - Sri Lanka’s land and condominium price bubble which has now peaked may pop with buildings now under construction expected to flood the market in the next two years and buyers turning cautious, analysts and developers have said. Speculators and foreign investors have been scared off by the flare up in fighting depressing sales for land and condominiums this year, according to developers and sellers.

A supply splurge will be led by the over four thousand condo units now under construction, while government is contemplating releasing thousands of acres of prime land for private development and many of Colombo’s ancestral properties are expected to come to the market over the next few years.

In classic bubble style more players jumped in because earlier developers had made exceptional profits, says Imran Furkan, an independent market analyst.

The buyers they speculated about are not around anymore.

A surge in demand for condos after the ceasefire with the LTTE weighed the market in favor of sellers since supply is fixed in the short term.

New houses and condos, that have 4-year construction lags, are now hitting the market shifting the scene to a buyers market.

Lalith Hettiaratchi, an