Land Prices in Western Province rise by 74% in 2018-2021
View(s):In the Western Province (except Colombo Municipality area) the overall land price values have increased by 74 percent from 2018 to 2021, according to the annual Land Price Index released by LankaPropertyWeb.
The company also revealed, in a media release, that, on an annual basis, the increase in average land prices between 2018 and 2021 was 15 percent (Annual Effective Rate). As a result, if an investor were to invest in property and hold it for 4 to 5 years, his initial investment would multiply largely over time.
When compared with the fluctuations in interest rates for fixed deposits, these values are a major contrast proving further towards the profitability of the real estate industry in the country, the property website said.
Between the first quarters of 2019 to 2021, fixed deposit rates have reduced from 11.41 percent to 6.29 percent. While the land price acceleration in the Western Province slowed down from 22 percent in 2019 to 18.56 percent in 2021. This is especially significant given that in most countries across the world, the real estate market has experienced major downturns with the spread of COVID-19.
During the last 4 years, a growing demand for land in the suburbs was also witnessed with price increases being reported from Kolonnawa, Hanwella, Peliyagoda and Welampitiya in the Colombo district. Cities such as Kelaniya, Dompe and Kadawatha in the Gampaha district showed price increases as well, providing further evidence to the changing patterns of Sri Lankan property buyers.
Head of Research at LankaPropertyWeb, Tharindu Jayarathne said, “When we analyse the land price movements for the last 4 years, it is inevitable that the demand has been driven away from district capitals to suburbs which have development agendas. Most prices are tagged with infrastructure development prospects.”
With the changes in infrastructure taking place across the Western Province, people’s motive to shift towards the suburbs of Colombo and other parts of the province has continuously risen over the years. Budget proposals towards housing development plans, highway construction projects and transportation convenience of non-durable products like vegetables, has led to certain cities experiencing triple digit appreciation during the 4 years.
In Colombo this was recorded in Angoda, Kolonnawa, Hanwella, Peliyagoda, Wellampitiya, Hokandara and Homagama. While in the Kalutara district, triple digit land price increases were seen in Ingiriya and Wadduwa. In the Gampaha district Kelaniya, Dompe and Kadawatha showed similar patterns as well.
Besides the increasing trend in prices, lands in certain parts of the country still remain quite affordable and under a price of less than Rs. 1 million. However, these lands also experienced an appreciation of over 100 percent per perch since Q1 of 2018. A full list of the land prices for Q1 2021 can be viewed at https://www.lankapropertyweb.com/house_prices.php#lands-wp