The Impact of Financial Crisis Towards the Real Estate Developments and Market in Colombo during 2020-2023

Abstract

Sri Lanka's economic collapse began in 2019 with the Easter bomb blast and worsened in 2020 due to the Covid-19 pandemic. The crisis affected industries like apparel, exports, tourism, and the construction industry. The Real Estate sector, which contributes to the economy, is crucial for retail, industrial, and commercial sectors. A research study aimed to identify the impact of the financial crisis on the Real Estate sector and identify strategies to overcome it. Semi-structured interviews with ten Real Estate Developers revealed risks such as withdrawal of investments, loss of sales, abandonment of businesses, and loss of opportunity cost. Strategies to overcome the crisis included small-scale projects and engaging in real estate or non-real estate-related alternative businesses. This study could help the Real Estate development industry proceed with construction projects and inform future research on strategies and business protection during economic collapse.