Colombo, Sri Lanka – 2023 marked a year of robust growth for Sri Lanka’s real estate sector, particularly in luxury apartments within Colombo’s Central Business District (CBD). According to the Real Estate Market Outlook Report 2024 (REMOR24) by LankaPropertyWeb, the leading real estate portal in Sri Lanka, prices for these high-end apartments soared by 48% from 2018 to 2023.

The report highlights a 33% increase in overseas interest in Sri Lankan properties compared to the previous year. This surge is attributed to expatriates attracted by the investment potential amidst the depreciation of the Sri Lankan rupee against major currencies like the US dollar and British pound. The demand for residential apartments is set to dominate the market by 2025, especially in the Western Province. Colombo leads with a commanding 90.6% market share, followed by Gampaha at 8.9% and Kalutara at 0.5%.

Search traffic for residential apartments saw notable increases from key markets, including the USA and Canada (23%), the United Kingdom (20%), Australia and New Zealand (17%), and the UAE (5%). The preferred apartment configuration remains the 3-bedroom layout, catering to both local and overseas buyers. Colombo 6 ranked highest among overseas buyers for purchasing residential apartments, while Colombo 2 was the top choice for local buyers. For rentals, Colombo 6 continued to be the most popular area for both overseas and local renters.

Rising Prices and Market Trends

Luxury apartments built before 2015 in Colombo’s CBD showed a significant 48% increase in square foot prices from 2018 to 2023. This rise reflects the growing appeal and investment potential of Colombo’s prime real estate. Additionally, the residential housing market saw increased overseas interest, particularly from the USA, Canada, the United Kingdom, Australia, New Zealand, and the UAE, with Negombo and Battaramulla emerging as popular locations for overseas and local buyers, respectively. Colombo 5 was the top choice for renters seeking residential houses.

The land market also experienced substantial interest, with bare land being the most sought-after type at 46%. Land prices in the Western Province saw a moderate increase of 2% from 2022 to 2023, with specific variations across regions and land types, such as tea, rubber, coconut, and beachfront properties.

Looking forward, the Sri Lankan real estate sector anticipates the addition of over 8,000 new residential apartment units by 2026, bringing the total to approximately 42,000 recognized units. The Real Estate Market Outlook Report 2024, developed by LankaPropertyWeb’s Development Consultancy and Research Team, is based on over a decade of extensive data from both public and proprietary sources.

Daham Gunaratna, Managing Director of LankaPropertyWeb, emphasized the report’s importance, stating, “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, the full Real Estate Market Outlook Report 2024 is available for download on the LankaPropertyWeb website.

About LankaPropertyWeb

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