Land prices in Sri Lanka’s commercial capital, Colombo, shows 9% increase over last year
Ada Derana: According to the 2023 Land Price Index (LPI) developed by LankaPropertyWeb (LPW), Colombo city land prices have shown a 9% increase since the previous year, while the rest of Colombo district, along with Gampaha and Kalutara districts have shown marginal increase or decrease. Overall, Western province has shown a 2% increase in land prices from 2022, compared with a 10% increase seen last year.
The average price of lands in the Colombo district (except Colombo 1-15) has shown a price increase of 1%. However, the Gampaha district has shown a 2% decline, while the Kalutara district has a 1% decline compared to the average of 2021-2022.
The annually released LPI shows a 70% growth in land prices for the last 6 years in Western Province, despite the cooling down of the growth seen last year. Colombo city lands seem to have bucked the trend with an increase this year, compared to the 2% decrease in 2022.
There is a higher demand for land for sale in the Western Province that is below Rs. 500,000 per perch, which drove prices up by 2% while lands over Rs.9M recorded a 6% increase. Despite last year’s fluctuations, this shows that most price demographics are showing a constant increase in Q1 2023. Also, the overseas searches have increased by 8% in Q1 2023 compared to Q1 2022.
An analysis of the land price fluctuations in the three districts of the Western Province shows that land for sale in Kalubowila has seen an increase of 23% in price, making it the highest increase in the Colombo district. Yakkala has been recorded as the city with the maximum land price increase in the district of Gampaha, with a 40% increase in land prices. While Ingiriya was the city with the highest land price increase rate in the Kalutara district in 2022, this year it shows a 5% price drop in Q1 2023. Bandaragama has come to the top of this list within the Kalutara district, with a staggering increase of 46% in land prices.
Commenting on the release of the 2023 LPI, Daham Gunaratna, the Managing Director of LankaPropertyWeb said, “the demand for lands has been lower in the past 12 months, mainly due to the higher interest rates for property loans. However, with the economic situation improving and interest rates coming down, we have seen a resurgence in interest for lands after the month of May 2023. The number of new land sales projects recently coming into the market is an example of that.”
Tharindu Jayarathne Head of Development Consultancy and Research of LankaPropertyWeb commenting on the release of the 2023 LPI, said the notable increase in land prices in Colombo city indicates a positive trend, suggesting sustained demand and potential investment opportunities. This growth can be attributed to factors such as development projects, infrastructural improvements, and the city’s status as a commercial hub. While the overall land price increase in Western Province has moderated to 2% compared to the previous year’s 10% growth, it is important to note that this still represents a steady appreciation in value. It indicates a resilient market despite socio-economic challenges faced during the recent year.
The increase in land prices in Sri Lanka’s commercial capital in the country is a clear indication of the overall expansion in the country’s economy. Sri Lanka’s economy has shown great resilience through the years and is once again on the path to recovery after facing a global pandemic and an economic crisis that followed it. The positive movements in Sri Lanka’s overall economy could be viewed by the profits recorded by many businesses in the private sector as well as the expansion and investment programmes undertaken by many local businesses. Sri Lanka’s geographical positioning in the Indian Ocean and the strong trade ties have also helped the country’s economic revival. Sri Lanka is once again on the path to becoming an emerging business destination in the South Asian region. With many international businesses showing interest in doing business in Sri Lanka, the island nation shows great business potential. Also, investing in Sri Lanka’s real estate could therefore be a lucrative investment that would guarantee a return on investment. Foreign businesses/investors could therefore explore opportunities in Sri Lanka.
|Article Code :||VBS/AT/20230616/Z_4|