Land prices bounce back to growth says LankaPropertyWeb

Land prices bounce back to growth in the latest Land Price Index by LankaPropertyWeb. 

The overall land prices in the Western Province increased by 7.8% compared to the previous year, according to the 2024 Western Province Land Price Index (LPI), developed by LankaPropertyWeb (LPW). The Land Price Index (LPI), updated annually, monitors the trends in asking price values of lands for sale across all three districts of the Western Province – Gampaha, Kalutara, and Colombo. Based on the Index findings, land prices in Gampaha District surged by 13% from the preceding year, while Kalutara witnessed an 8% rise. In the Colombo district (excluding Colombo 1-15), a growth of 8% was observed, with Colombo 1-15 explicitly marking a 2.3% increase.

The increase in the land prices in all three districts of the Western Province reverses last year’s decline in the Gampaha and Kalutara districts. In contrast, the Colombo district (including Colombo city) has shown a consecutive price increase.

Gampaha District

In Gampaha District, land prices have experienced an average increase of 13% in 2024 compared to the previous year. Variations in land prices have been observed across various cities. Leading the surge in prices are Negombo, Ragama, and Kadawatha, which have emerged as frontrunners with substantial escalations. Negombo, in particular, boasts an impressive 34% increase, underscoring its growing prominence as a desirable living and investment destination. Similarly, Ragama showcased a commendable 27% increase, attracting savvy real estate investors with its promising prospects, thus contributing to the overall growth and appeal of the Gampaha region.

Kalutara District 

In Kalutara, land prices have experienced an average increase of 8% in 2024. Land price changes have been observed in critical areas, showcasing the region’s vibrant real estate landscape. Ingiriya stands out with an exceptional 27% surge, accompanied by a growth of 500% from Q1 2019 to Q1 2024, underscoring its potential as a promising investment destination and a testament to the region’s growth trajectory. Similarly, Panadura reflects buoyant market sentiment with a noteworthy 27% rise, reaffirming its status as a thriving locale and further bolstering the attractiveness of the Kalutara district to investors and developers alike.

Colombo District

Colombo 1-15 in the most recent period analysed (2023-2024), land prices rose by 2.30%, highlighting sustained growth. Having demonstrated continuous price growth from 2018 to 2021, Colombo’s 1-15 prices experienced a -2.33% dip in 2022; however, they rebounded in the following two years. These fluctuations reflect the dynamic nature of Colombo 1-15’s real estate market, shaped by economic, social, and regulatory factors while maintaining appeal for long-term investors.

In other areas of Colombo in Colombo District (apart from Colombo 1-15), land prices have experienced an average 8% increase in 2024. Specific areas have witnessed significant movements in land prices, reflecting the varied nature of the district’s real estate market. Rajagiriya emerges as a nucleus of demand and development activities, boasting a 25% increase, indicative of its growing prominence as a prime investment destination within the Colombo district. Additionally, Dehiwala has contributed to the district’s growth trajectory with a respectable 19% increase, signalling sustained investor interest and further solidifying its position as a critical player in Colombo’s evolving real estate landscape.

Commenting on the release of the 2024 LPI, LankaPropertyWeb Managing Director Daham Gunaratna said, “Over the past 12 months, we’ve seen an increase in demand for land and heightened market activity. This trend has been propelled by banks offering low loan rates starting from as low as 12% and demand for house construction picking up, among other factors. With the economic situation improving and interest rates decreasing, we have seen a resurgence in land interest in the past year. An example is the number of new land sales projects coming into the market during this period.”

The historical land price data from 2019 released by LankaPropertyWeb, along with the Land Price Index, shows that all cities in the Western Province showed an average price increase of 57.7% for the last 5 years, with Ingiriya showing a remarkable 500% increase during this period.