Surge in Luxury Apartment Prices in Colombo’s CBD: A 48% Increase from 2018 to 2023

Colombo, Sri Lanka – The Sri Lankan real estate market has been experiencing a notable surge in interest from overseas investors, with a significant 33% increase in inquiries about Sri Lankan properties in 2023 compared to the previous year. This trend is highlighted in the Real Estate Market Outlook Report 2024 (REMOR24) by LankaPropertyWeb, Sri Lanka’s leading real estate portal.

Rising Demand for Residential Apartments

The REMOR24 report reveals that residential apartments are set to dominate Sri Lanka’s real estate market by 2025. The Western Province, with Colombo at the forefront, is leading the charge. Colombo stands out with a dominant 90.6% share of the market, followed by Gampaha at 8.9%, and Kalutara at 0.5%. Among apartment configurations, the 3-bedroom layout remains the most sought-after.

Search traffic from key international markets has seen a significant boost. Expatriates from the USA, Canada (23%), the United Kingdom (20%), Australia, New Zealand (17%), and the UAE (5%) are driving this interest. This influx is partly due to the favorable investment potential in the face of the Sri Lankan rupee’s depreciation against major currencies such as the US dollar and the British pound.

Sharp Increase in Luxury Apartment Prices

One of the most striking findings of the report is the 48% increase in average asking prices per square foot for luxury apartments in Colombo’s Central Business District (CBD) from 2018 to 2023. This sharp rise underscores the growing value and demand for high-end properties in the city. Colombo 6 emerged as the top choice for overseas buyers, while local buyers favored Colombo 2. Rental preferences also favored Colombo 6 among both overseas and local renters.

Growth in the Residential Housing Market

The residential housing market has also seen increased overseas interest, particularly from markets like the USA, Canada, the United Kingdom, Australia, New Zealand, and the UAE. This interest is reflected in the higher search traffic and rising average selling prices per square foot in Colombo and its suburbs. Negombo and Battaramulla are notable areas of demand, with Colombo 5 being the top location for both overseas and local renters.

Land Market Trends

The land market has also shown substantial interest, particularly in bare land, which constitutes 46% of the demand. Land prices in the Western Province experienced a moderate 2% increase from 2022 to 2023, with variations based on land type, including tea, rubber, coconut, and beachfront lands.

Looking Ahead

The Sri Lankan real estate sector is poised for continued growth, with over 8,000 new residential apartment units expected to be added by 2026, contributing to a projected total of approximately 42,000+ recognized units.

Daham Gunaratna, Managing Director of LankaPropertyWeb, emphasized the importance of the REMOR24 report: “Amidst economic shifts and market dynamics, our inaugural ‘Real Estate Market Outlook 2024’ aims to provide stakeholders with a comprehensive view of Sri Lanka’s evolving real estate landscape.”

Tharindu Jayarathne, Head of Development Consultancy & Research at LankaPropertyWeb, added, “Despite economic challenges, the resilience of Sri Lankan properties as an inflation hedge is evident in the market’s performance through 2023. We anticipate robust growth across sales, rentals, and land sectors shortly.”

For more detailed insights and to download the full Real Estate Market Outlook Report 2024, visit the LankaPropertyWeb website.

About LankaPropertyWeb

LankaPropertyWeb is Sri Lanka’s leading real estate portal, offering comprehensive property listings, market trends, and consultancy services. With a commitment to transparency and reliability, LankaPropertyWeb serves as a trusted resource for investors, developers, and property seekers across the nation.