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Residential Real Estate Leases - Sri Lanka

Sri Lanka

The revenue of the Residential Real Estate Leases market market in Sri Lanka is expected to reach US$3.69bn in 2024.
Apartment Leases dominate this market segment with a projected market volume of US$2.07bn in the same year.
The market is anticipated to grow at an annual growth rate (CAGR 2024-2029) of 3.54%, leading to a market volume of US$4.39bn by 2029.
The demand for residential real estate leases in Sri Lanka has been steadily increasing, driven by a growing urban population and a rise in foreign investment in the country's property market.

Key regions: Japan, China, Australia, Germany, United States

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Analyst Opinion

The Residential Real Estate Leases market in Sri Lanka has been experiencing significant growth in recent years.

Customer preferences: One of the main reasons for this growth is the increasing demand for rental properties among the local population. Many Sri Lankans are opting to rent rather than buy homes, as it offers them more flexibility and affordability. Renting allows individuals to live in desirable locations without the high costs associated with purchasing a property. Additionally, the younger generation, in particular, is more inclined towards renting as they prioritize mobility and the ability to relocate easily for job opportunities.

Trends in the market: Another trend in the market is the rise of co-living spaces and serviced apartments. These types of accommodations are gaining popularity among expatriates, students, and young professionals who are looking for hassle-free living arrangements. Co-living spaces provide shared amenities and communal living areas, fostering a sense of community among residents. Serviced apartments, on the other hand, offer the convenience of hotel-like services such as housekeeping and concierge services.

Local special circumstances: Sri Lanka's growing tourism industry is also contributing to the development of the residential real estate leasing market. As more tourists visit the country, there is a greater demand for short-term rental properties, such as vacation homes and guesthouses. This has led to the emergence of online platforms that connect property owners with travelers, making it easier for individuals to rent out their properties on a short-term basis.

Underlying macroeconomic factors: Several macroeconomic factors have played a role in the growth of the residential real estate leasing market in Sri Lanka. The country's economic development and increasing urbanization have led to a rise in the number of people moving to cities for employment and educational opportunities. This has created a higher demand for rental properties, especially in urban areas. Furthermore, the government's efforts to promote foreign investment in the real estate sector have also had a positive impact on the market. The introduction of favorable policies and incentives for foreign investors has attracted international companies and individuals to invest in residential leasing properties in Sri Lanka. This has not only stimulated the market but also contributed to the overall economic growth of the country. In conclusion, the Residential Real Estate Leases market in Sri Lanka is experiencing significant growth due to changing customer preferences, the emergence of new trends such as co-living spaces and serviced apartments, the influence of the tourism industry, and underlying macroeconomic factors such as urbanization and government policies. These factors are likely to continue driving the market's development in the coming years.

Methodology

Data coverage:

Figures are based on total and average revenue of residential apartment leases.

Modeling approach:

Market size is determined by a bottom-up approach. We use national statistics, international organizations, and industry associations to analyze the markets. To estimate the market size for each country individually, we use relevant key market indicators and data from country specific industry associations such as GDP, price level index, household wealth, household size, number of renter and owner households, housing consumer spending per capita.

Forecasts:

We use a variety of forecasting techniques, depending on the behavior of the market, for instance, exponential trend smoothing. The main drivers are GDP per capita, population, number of renter and owner households, price level index, housing consumer spending per capita.

Additional Notes:

Data is modeled using current exchange rates. The market is updated twice per year in case market dynamics change. The impacts of the Russia-Ukraine war considered at a country-specific level.