The academia called for the country’s real estate market to be organized in a formal manner in view of recent tragic events resulting from both natural and man-made disasters.
Head of the Department of Estate Management and Valuation of the Faculty of Management Studies and Commerce of the University of Sri Jayewardenepura, Prof. R.G. Ariyawansa observed that real estate is a live entity or environment rather than a physical structure which forms the basis of all socio-economic development and therefore should not be solely constituted of structures on the land like buildings, offices and houses, adding that how the country needs to organize the real estate market would be a major factor concerning addressing such.
Due to the informal nature of the real estate market (where the market does not provide any strategy and exists only in theory and investors spend their monies, including black money, based on personal agendas), there would be more or less a short-term impact of value on the said market as people would soon forget the tragedy and once again individuals would take the risk and invest money on land with the prospect of reselling when a risk arises.
This process is mainly due to the informal market culture established in the real estate industry, he noted. “Certain investments take place within formal markets and therefore organized investors including foreign ones may think twice and follow professional approaches,” he remarked.
The recent floods and the landslides which followed left hundreds killed and thousands displaced. The Government demarcated most of the disaster prone areas as High Security Zones (HSZ) which meant that residents could not live there anymore.
As the affected people were being assisted from various corners of the country, officials have indicated that unauthorized man-made structures too played a pivotal role in aggravating the situation.
Chairman, Central Environment Authority (CEA), Prof. Lal Dharmasiri claimed that unauthorized structures that were built in sensitive areas also had a major role to play in the extent of the impact of the disaster.
It was also reported that a recent research by a group of academics at the University of Sabaragamuwa had blamed floods on the reclamation of marshland and river and canal reservations. The report has been reportedly handed over to the President and Prime Minister.
Prof. Ariyawansa remarked that housing related planning and the regulations implemented with regard to housing and planning are not fully implemented in practice and the existing standards are poor.
He added that there was little or no monitoring and the supervision was lacking despite approval being obtained from the local government authorities and other relevant organizations, which were by and large matters relegated solely to paper work.
Elsewhere, he pointed out that in low level urban areas, it was essential that what is to be constructed in the future – for an instance, what type of structures are to be promoted, and whether single storey buildings are to be discouraged and organized vertical apartments for housing are to be opted for along with other such aspects – should be looked at.
“New regulations and property standards which include analyses of the building structure and the layout, what materials are used, what technology is used, what safety methods are adopted, what are the standards concerning the quality of workmanship and repair, health and safety aspects, should be put in place as existing ones are not strong enough,” he explained.
He also said that strategic planners should allocate safety places or places for evacuation when preparing the master plan.
“Management of technology too is in a very poor state,” he pointed out, adding that the national wastage of infrastructure has been very high, with frequent breakdowns, poorly established supply lines of water and electricity, the substandard quality of the fittings and equipment and so on ultimately increasing the cost per unit of services.
It is a must that drastic and adequate changes must take place and a special, separate structure in the form of a management body or authority for mega cities to monitor aspects in a holistic manner is needed in this regard, he further explained, adding that however not everything should be done at once in order to affect change but instead through a gradual, incremental process, where one constantly refers to the master plan.
Sri Lanka should specifically address the issue of educating the society on property markets, real estate markets and land markets, as public awareness concerning machinery, land and buildings are poor, he observed.
Meanwhile, Director, Real-estate Intelligence Unit (RIU), Roshan Madawela said that this latest environmental disaster posed some serious questions with regard to how best to meet the housing needs of the urban population that live in vulnerable areas.
“How do we breakout of the vicious cycle that has resulted in the spread of illegal settlements along the waterways of the Western Province where the politicians over many decades have tended to contribute to the problem rather than present any solutions?” he queried.
According to Madawela, one option that has worked in the Asian region is for the Government to engage with developers who will build vertical social housing developments in return for land plots that the developer can build on for commercial use.
Regular maintenance needed -KPMG
KPMG Sri Lanka’s Real Estate Advisory Services Practice highlighted the need for regular maintenance where canals are cleaned and cleared up along with constant attention needing to be paid to aspects concerning storm water drainage.
Principal – Financial and Real Estate Advisory of KPMG Sri Lanka, Shiluka Goonewardene said that a lot of companies and commercial developers were already looking for and demanding alternate/alternative spaces for the establishment of their factories and warehouses.
Although there will not be an immediate effect on housing, moving forward, the demand and thereby the value afforded will be less for houses and apartments in areas known to be flooded, which are outlined as being in the suburbs of Colombo, he added, noting that already land prices in such places were substantially low.
“In the medium to long-term, there will be a lot more heavy emphasis placed on the obtaining of environmental clearances, rather than going about such matters haphazardly. There will be cognizance of wetlands and flood prone areas,” he mentioned.
Looking for new locations a challenge – Govt
The Ministry of Housing and Construction said that it would hunt for new locations for houses for the disaster hit victims only after receiving detailed reports from the respective local government officials on the damage estimates.
Secretary to the Ministry, W.K.K. Athukorala said the Ministry was awaiting the reports to be submitted by the respective regional officials.
The Government had demarcated several areas as High Security Zones following the disaster which has placed the residents of the respective areas in further problems. Speaking to Nation, she pointed out that locating new areas for the affected people would be a challenging task. “Issues such as livelihood opportunities, access to education and health should also be considered,” she pointed out. “More importantly, the place of location should satisfy the residents,” she added.