Land prices in outskirts soar as city growth stabilises: LPI 2025

Sri Lanka’s land market maintained solid growth in 2025, with the Colombo suburbs and Western Province districts emerging as key drivers, according to the latest Land Price Index (LPI) 2025 (updated) published by LankaPropertyWeb (LPW). 

The 2025 index shows that Colombo 1-15 recorded a 4% year-on-year (YoY) increase in average land prices per perch, reaching Rs. 12 million, while the Colombo suburban areas saw a stronger growth of 8%, averaging Rs. 2.3 million per perch.

 In the broader Western Province, the Gampaha District average land price per perch rose 15% to Rs. 769,097, whereas the Kalutara District gained 10%, reaching Rs. 486,396.

Suburban and emerging areas lead price growth

The report highlights a clear shift in investor interest towards suburbs and emerging towns offering strong development potential and affordability. The recent rise in land prices has been largely fuelled by new residential projects, ongoing land sales projects, and improvements in local infrastructure over the past few years.

Yakkala in Gampaha emerged as a standout performer, with prices rising 35% to Rs. 831,015 per perch, closely followed by Homagama in the Colombo suburbs at Rs. 916,912 per perch, reflecting a similar 35% increase, attracting investors looking for residential land for sale in these suburbs. 

Negombo in Gampaha recorded a 35% rise to Rs. 1,561,925, while Bandaragama in Kalutara grew 34% to Rs. 545,533. In Colombo’s suburban belt, Piliyandala posted a 30% growth to Rs. 1,222,181 per perch, and Kaduwela, Pannipitiya, Moratuwa, and Nugegoda all experienced gains above 25%, reflecting sustained investor demand.

The 2025 LPI data indicates that price appreciation has been strongest in areas connected to urban infrastructure improvements and new development projects. Central Colombo areas showed more restrained growth, with Colombo 10 rising 25% to Rs. 14,589,277 per perch and Colombo 4 increasing 17% to Rs. 18,870,504, while areas such as Colombo 6 and Colombo 13 experienced minimal gains.

Long-term growth trends highlight high returns in suburbs

Looking at longer-term trends from 2020 to 2025, several locations outside main cities have seen remarkable appreciation. 

Ingiriya in Kalutara topped the five-year growth chart, with the average land price per perch rising 322% to Rs. 344,850. Padukka in the Colombo suburbs followed with a 221% increase to Rs. 387,628, while Ragama in Gampaha grew 183% to Rs. 1,121,599. Dompe, also in Gampaha, recorded a 143% rise to Rs. 289,250 per perch, and Bandaragama in Kalutara appreciated 130% to Rs. 545,533. Other high-performing suburban areas include Moratuwa, Kaduwela, Piliyandala, and Hokandara, all demonstrating strong cumulative gains over the past five years, highlighting the growing attractiveness of affordable land for sale in the suburbs.

According to LPW, this upward trend reflects a shift in buyer preference towards well-connected, affordable suburbs with strong development prospects. “Investors are focusing on areas that combine accessibility with value, driving robust growth in Gampaha, Kalutara, and Colombo’s suburban belt,” the report noted.

The LPI captures annual changes in land prices across the Western Province. Publicly available average asking prices for bare land published on LPW and other online media were used in the analysis. The LPI considers 2017 as the base year (indexed at 100), and the 2025 update reflects comparisons with 2024 averages. The Price Index has been updated in 2025 with average prices taken for a calendar year, rather than quarter one to quarter one, as done previously. 

Investors can also explore opportunities in various areas, including listings for land for sale in Western Province. Prices within specific areas may vary depending on proximity to main roads, junctions, and other locational factors. For accurate prices in your neighbourhood, users are encouraged to check property listings on LPW or consult a registered valuer.

Beyond the index, LPW offers a suite of tools and resources for investors and homebuyers, including property listings, valuation reports, price metres, and market insights, reinforcing its position as Sri Lanka’s leading online real estate platform.

For the full list of land prices for 2025, visit: https://www.lankapropertyweb.com/land-prices/