Tourism growth impact on real estate
View(s):Real estate and tourism are two different industries that correlate and influence on one another, says real estate firm Lamudi.lk.
“Especially, by the end of the 30 year-long civil war, the country was able to resolve all its security issues, establishing confidence in entering different parts of the country for locals as well as tourists around the globe. This resulted in a considerable growth in the tourism industry as well as the real estate sector,” the company said in a media release last week, just before its acquisition by LankaPropertyWeb.
When discussing the impacts tourism has on the real estate industry in Sri Lanka, first it is important to pay attention to some of the benefits of the tourism sector that helps nourish the property sector and the economy of the country.
“Sri Lanka considered as an island encapsulated in a plethora of cultural and religious values as well as natural resources. Hence, the country is always in the limelight among those who travel for different purposes. According to reports published by the Sri Lanka Tourism Development Authority, 2016: A total of 2.058,000 tourists arrived in Sri Lanka, an increase of 14 per cent compared to the previous year.
“In 2017, Sri Lanka was recognised as one of the world’s fastest growing tourism markets. With 52.8 points, the island nation was placed 4th, accompanied by Japan, Iceland, Hungary, and Chile. As many travellers enter the country it is evident that they continuously search for accommodation options both mid-scale and luxury. Prime cities such as Colombo, Galle, and Kandy lure tens and thousands of tourists every day.
Based on Lamudi’s in house data, these cities are also considered as prime real estate cities that show immense popularity as well as rising property prices when it comes to residential and commercial property,” the release said.
Research and analysis conducted focusing on the tourism industry has also shown that this sector plays a major role in fostering many business and economic opportunities for both locals as well as foreigners. “One of the finest examples for this is the Colombo Port City which is set to be completed by the year of 2020 and is predicted to convert Colombo into a ‘smart city’. In addition to this, now we see an increase in mix developments such as the Twin Spectacle which is located in Colombo 03, and the Iconic and Elements Residencies in Rajagiriya, caters to the rising residential and commercial demands,” Lamudi said.
Future
In addition to the growth in the hotel industry, the luxury residential and commercial properties, a current rising trend in the country is the growth in vacation homes. “Since travelling across the country has become more affordable, and due to the government’s decision to reduce levies on the hotel sector and the travel industry, we are bound to see a rise in demand towards short-term living options as well as multi-family living options for those who prefer living with locals to get a taste of living in Sri Lanka.”
Lamudi’s inhouse search results show that there is an over 45 per cent increase in the number of tourists who stays in mid-scale hotels, multi-family homes and villas. Based on the above statistics, the progress of Sri Lanka’s tourism accommodation options for 2018 Q3, are as follows.
- Projects that received final improvement = 337
- Projects that are under construction = 113
- Projects that are in operation = 182
- Projects that are not yet started = 42
The total value of investment for projects that has received final improvement stands as US$2,900.1 million (Source – Tourism Industry Report 2018 Q3).
Entertainment and Healthcare are two other main sectors which seem to be benefiting thanks to the constant improvements in the tourism sector of the country. Developers no longer aims to just build residential properties, but also focus on providing a 360 quality living experience by incorporating malls, cinemas, and other amenities to improve the living standards of citizens. Furthermore, Ayurveda retreats across the island are also rising in population thanks to the arrival of foreign travellers, the real estate firm said.