Sri Lanka’s Land Market Shows Strong Momentum Amid Growing Demand, Reports LankaPropertyWeb

The Sri Lankan land market is gaining renewed strength, with Colombo and the broader Western Province leading the way in price growth, according to the latest Land Price Index (LPI) published by LankaPropertyWeb (LPW).

The 2025 index reveals that land prices in Colombo city (Colombo 1-15) have risen by 7% year-on-year, while the overall Western Province recorded an 12% increase — a notable jump from the 8% rise observed the previous year. The report highlights a sustained upward trend in land values, particularly in Colombo’s suburbs and key districts like Gampaha and Kalutara.

Within the Colombo district (excluding the Colombo 1-15 area), average land prices surged by 20%, underscoring a shift in investor focus toward suburban locales offering better affordability and development potential. Gampaha district saw an impressive 14% rise, while Kalutara posted a more modest but steady 6% increase over the past year.

According to LPW, demand has been especially robust for lands priced below Rs. 500,000 per perch. This segment saw a remarkable 107% price increase between the first quarter of 2020 and 2025. In contrast, high-end plots priced above Rs. 9.5 million per perch experienced limited growth, suggesting a tilt in buyer preference toward more affordable and mid-range properties.

Per Perch Price Increase as a % (2024 Q1 – 2025 Q1)

(Main Cities of Colombo District excluding Colombo 1-15)

Colombo’s real estate landscape continues to evolve. The central Colombo 1-15 area registered a 7% uptick in land values this year, building on consistent gains over the last five years. However, it is the emerging suburbs that are showing the most dynamism. Kolonnawa led the district with a 21% price increase, driven by its proximity to the city, improved transport links, and ongoing urban development projects. Piliyandala, Athurugiriya, and Homagama also recorded healthy gains, reflecting sustained investor interest.

In Gampaha district, Yakkala emerged as a standout performer, with land prices soaring by 55%, while the Gampaha city area itself recorded a 42% hike. The district’s enhanced connectivity, expanding infrastructure, and growing appeal as a suburban hub have fueled this surge.

Kalutara district showed moderate but consistent growth, with Ingiriya was the city with the highest land price 20% increase in Kalutara district and Horana posting a significant 16% increase. Panadura reflecting a positive 7% rise, signaling renewed confidence among investors and developers.

Per Perch Price Increase as a Percentage (2020 Q1 – 2025Q1)

(Main Cities of Colombo District Excluding Colombo 1-15)

LPW’s index data suggests that price appreciation has been strongest in areas tied to infrastructure upgrades and suburban development agendas. "It is evident that demand has steadily shifted from district capitals to well-connected suburbs with promising growth prospects," the report noted.

The market’s recovery follows a challenging period marked by economic headwinds, including high interest rates and constrained lending from commercial banks. However, with the Central Bank’s recent easing of monetary policy and stabilization of interest rates, LPW expects the land market’s resurgence to continue through the remainder of 2025.

This index captures annual changes in land prices in the most populated province in Sri Lanka; Western Province. Publicly available asking prices for bare lands published in LPW, and in other online media were used in the analysis. The Land Price Index considers the base prices of 2018 equal to 100 when determining the price fluctuation in the years after. The Q1 2025 update reflects a comparison with the average of Q1 2024.

Prices within the area will have their own variances, such as land close to main roads or junctions being expensive and above average. If you wish to obtain more accurate prices for your land or neighborhood prices, then you should view ‘land for sale’ listings for that area, and check with an estate agent or a registered valuer in your area. 

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

For the full list of land prices for Q1 2025, visit: https://www.lankapropertyweb.com/land-prices/