Sri Lanka’s condominium market is becoming smaller, costlier and more tightly concentrated in Colombo, according to Central Bank of Sri Lanka data for the April–June quarter, the Daily FT reported.

Prices and volumes moved in opposite directions. The Price Index for New Condominiums in the Colombo District rose 3.2% year-on-year to 280.6, putting new apartment prices at 2.8 times their 2019 level. The index is adjusted for property characteristics such as size and location, so it tracks underlying price change rather than shifts in the mix of units sold.

Meanwhile the Condominium Property Sales Volume Index, which counts transactions reported by developers in the Colombo District and other major cities, fell 6.7% year-on-year to 190.2. The Central Bank reported the same decline in a release covered by EconomyNext on 6 October.

The cheap end of the market has almost disappeared

The shift toward expensive units is the sharpest change in the data. Apartments priced above Rs. 50 million made up 55% of sales, against 34% a year earlier. Within that, units above Rs. 75 million rose to 26% of sales from 19%, and the Rs. 50–75 million band to 29% from 15%.

At the other end, units below Rs. 25 million fell to just 5% of sales — down from 17% a year earlier and 19% in the previous quarter. The Rs. 25–50 million band remained the single largest segment at 40%, but that was down from 49%.

Demand narrowed geographically too

Colombo District accounted for 78% of transactions, up from 50% a year earlier. Single condominium projects in Gampaha and Kalutara, which typically offer lower price points, saw their share fall to 20% from 48% a year earlier and 32% in the previous quarter. Projects elsewhere — including Galle, Kandy, Sigiriya, Nuwara Eliya and Nilaveli — accounted for 2%.

Existing stock is largely absorbed: 96% of units in completed single condominium projects and 81% in completed mixed developments had been sold, while 55% of units in ongoing single projects were reserved.

Developers remain heavily dependent on buyers. Pre-sale deposits were the largest funding source at 43%, followed by equity at 29% and bank loans at 28% — which ties new projects closely to the pace of off-plan sales.

Asking prices rose faster than transaction prices

Across Colombo’s wider property market, asking prices rose 15.2% for land, 12.6% for condominiums and 9% for houses year-on-year. Both sources carry these figures identically.

The monthly path diverged within the quarter. The condominium asking price index climbed to 219.4 in June from 208.2 in March, a 5.4% rise over three months and 8.2% since January. House asking prices rose 3.1% over the same period to 192.8. Land asking prices eased to 173.2 in June from a March peak of 176.9, a 2.1% decline, while remaining well above year-earlier levels.

The survey covered 20 condominium developers in the quarter.

A discrepancy in the Daily FT’s own figures

The Daily FT’s body text says most buyers used their own funds, with bank loans accounting for about a quarter of purchases, broadly unchanged from a year earlier. Its own summary points, however, put bank loans at “about a third.” The two cannot both be right.

The likelier explanation is a conflation of two different figures: buyers’ use of bank credit, and the 28% of developer project funding that comes from bank loans. This article uses the body figure — about a quarter — and flags the inconsistency rather than resolving it.

EconomyNext cannot adjudicate it, as its account does not give a share for buyer financing. It does record that purchases by Sri Lankan residents rose slightly against both the previous quarter and the previous year, while purchases by dual citizens and foreigners fell slightly.

The two filings also band the market differently: EconomyNext quotes the Central Bank on a “50-70 million” range, where the Daily FT uses Rs. 50–75 million. The Daily FT’s bands sum to exactly 100% in both the current and year-earlier quarters, so its banding is the internally consistent one.

Not reported

Neither filing gives the absolute number of transactions behind the volume index, the total value of sales, or how many units are unsold across ongoing projects. Neither reports what share of the 20 surveyed developers responded, nor whether the Central Bank offers an explanation for the collapse in the sub-Rs. 25 million segment — whether lower-priced stock is no longer being built, or is being built and not selling.

Neither account reports the Central Bank’s own commentary on whether the price rise reflects construction costs, land costs or demand, and neither gives a forward projection. The underlying Central Bank publication could not be retrieved directly at the time of writing, so both accounts of it are secondary.