The Sri Lankan land market has experienced significant interest, with bare land being the most sought-after, representing 46% of the market. Land prices in the Western Province rose by 2% from 2022 to 2023, reflecting regional variations across different land types including tea, rubber, coconut, and beachfront properties.
Looking forward, the Sri Lankan real estate sector expects over 8,000 new residential apartment units to be added by 2026, bringing the total to approximately 42,000+ units, according to the Real Estate Market Outlook Report 2024 (REMOR24) by LankaPropertyWeb.
The residential housing market has seen a notable increase in overseas interest, particularly from countries such as the USA, Canada, the UK, Australia, New Zealand, and the UAE. This heightened interest is reflected in increased search traffic and a rise in average selling prices per square foot in Colombo and its suburbs. Noteworthy locations include Negombo for international buyers and Battaramulla for local buyers, while Colombo 5 is popular for both local and international renters.
Demand for residential apartments is expected to dominate by 2025, especially in the Western Province, with Colombo leading at 90.6%, followed by Gampaha at 8.9%, and Kalutara at 0.5%. The 3-bedroom apartment remains the most sought-after configuration.
The report also highlights a significant rise in average asking prices per square foot, particularly in Colombo 1-15 and surrounding suburbs. Luxury apartments in Colombo’s CBD, built before 2015, saw a 48% increase in prices from 2018 to 2023. Colombo 6 is the top location for both purchasing and renting among overseas buyers, while Colombo 2 is preferred by locals.
Daham Gunaratna, Managing Director of LankaPropertyWeb, and Tharindu Jayarathne, Head of Development Consultancy & Research, commented on the market’s resilience and anticipated robust growth in sales, rentals, and land sectors despite economic challenges.