Sri Lankan real estate has the opportunity to serve the middle-income segment of Maldivian diaspora looking for affordable housing, as there is a market gap within the Maldivian real estate market, Maldivian Islamic Bank Chief Business Officer Hammaad Rasheed Hussein said, speaking on a panel hosted by Research Intelligence Unit (RIU) recently.
“For normal middle income level families affordability or eligibility is actually on the diminishing side. The biggest gap that we see right now is there’s no major supply in the mid-range sector. All of these properties that are coming up, almost all of them are in the luxury market,” Hussein said.
As a majority of Maldivian real estate projects in the recent past have been geared towards the luxury tourism and expat segment, Hussein said that its pool of middle income earners have been underserved within the market. “There is a gap in the market for these middle income families. We have a finite pool of population, which is low. Over the last 7-8 years, most people who are bankable have taken up apartments and housing units.”
“The other point is that there are investors who are looking to buy multiple apartments, which is also a finite pool of people. We see a gap emerging in the middle range.”
Sri Lanka’s Port City Colombo at present is marketed towards the Maldivian businesses for real estate development, however, there have been no substantial propositions for middle income families looking for real estate in Sri Lanka.
According to the Central Bank of Sri Lanka (CBSL) Real Estate Market Analysis for the first quarter of 2026, the Price Index for New Condominiums in the Colombo District increased by 18.5% year-on-year, reaching 284.4, while the Condominium Property Sales Volume Index dropped 15.2% over the same period.
Further, the CBSL’s survey also indicated a notable shift in demand towards higher-priced properties. Transactions involving units priced between Rs 50 million (m) and Rs 75 m, as well as those above Rs 75 m, recorded a slight increase, while sales in the Rs 25 m to Rs 50 m segment declined.
“From a bank’s perspective, bringing down the financing cost is important. Ultimately the cost of the apartment is where we have to address. There has been a significant increase in the cost of apartments, if you look at the per square meter value, it has increased to a significantly high level.”
To ensure better affordability, Hussein suggested that real estate companies look to absorb the cost of land to a certain extent, as means of pricing apartments for more affordability.
“The holistic view will be that we should look at how we can bring down the cost of the apartments; one is looking at the land, subsidizing land cost for certain projects – if we are to reduce the cost of apartments.”
He also proposed that policymakers focus on providing incentives that could range from reduced duties on imported construction material, tax benefits and first-time homeowners.
“The second is that the government and policymakers must look at certain incentives; maybe the duty on materials that are imported for projects, or maybe tax benefits for certain projects. We have to do something for first home buyers. GST across the board is applicable, so maybe there is some way the policy makers can come up with a first home ownership tax benefit.”
He concluded that Sri Lanka’s real estate market, comparative to the Maldives, also offers the security of foreclosures, as laws such as the parate law exist. “When you look at the Sri Lankan market, in terms of foreclosure, the legal system is stronger. There is Parate. This is where the banks in Maldives struggle. We take 10-12 years for legal battles, for foreclosure.”