Residential Real Estate - Sri Lanka

The Residential Real Estate market market in Sri Lanka is forecasted to reach a value of US$244.90bn in 2024.
It is expected to demonstrate a compound annual growth rate (CAGR 2024-2029) of 1.97%, leading to a market volume of US$270.10bn by 2029.
When compared globally, China is projected to generate the highest value in the Real Estate sector, with US$112.9tn in 2024.
The demand for luxury beachfront villas in Sri Lanka is increasing due to the country's stunning coastline and growing popularity as a tourist destination.

Definition:

The residential real estate market covers the leases and transactions of residential properties. Residential real estate leases refer to the market where landlords and tenants enter into agreements for the rental of residential properties, such as apartments, houses, and condominiums, while residential real can be defined as buying, selling, or transfer of ownership of residential properties.

Structure:

The residential real estate market covers real estate transactions and leases, and the section, residential real estate leases, is divided into apartment and house leases.

Additional information:

The market contains the following KPIs: real estate value aggregated for all countries and regions, average real estate value, real estate transaction revenue, number of real estate sold, number of leased and owned real estate, average room per resident, and dwelling type shares. The dwelling type shares comprise the share of the population that lives in houses and apartments. These shares are displayed for real estate owners and for real estate renters as well.

Residential real estate transactions
Residential real estate leases

Real estate agencies
Construction companies
Accommodation services, such as Airbnb
Commercial real estate leases and transactions
Publicly owned buildings used by the local government
Buildings used for public health care services

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

Customer preferences: One of the main reasons for this growth is the changing preferences of customers in Sri Lanka. As the country's economy has been growing steadily, there has been an increase in the purchasing power of the middle class. This has led to a greater demand for residential properties, particularly in urban areas. Additionally, there has been a shift in customer preferences towards modern and luxurious living spaces, with amenities such as swimming pools, gyms, and landscaped gardens becoming increasingly important.

Trends in the market: Another trend in the market is the rise of high-rise apartment buildings. As land availability becomes more limited in urban areas, developers are turning to vertical construction to meet the growing demand for housing. These high-rise buildings not only provide more housing units in a limited space but also offer a range of amenities and services within the same complex, such as shopping centers, restaurants, and recreational facilities.

Local special circumstances: Sri Lanka's real estate market is also influenced by local special circumstances. The country's strategic location in the Indian Ocean has made it an attractive destination for foreign investors, particularly from China and India. These investors are not only interested in residential properties but also in commercial and industrial real estate. This influx of foreign investment has contributed to the growth of the residential real estate market in Sri Lanka.

Underlying macroeconomic factors: Several macroeconomic factors have contributed to the development of the residential real estate market in Sri Lanka. Firstly, the country's strong economic growth has led to an increase in disposable income and a growing middle class. This has created a demand for better housing options and has driven the growth of the market. Secondly, the government has implemented several policies to encourage foreign investment in the real estate sector. These policies include tax incentives, streamlined approval processes, and relaxed restrictions on foreign ownership. These measures have attracted foreign investors and have contributed to the growth of the residential real estate market. In conclusion, the Residential Real Estate market in Sri Lanka has been experiencing significant growth and development due to changing customer preferences, the rise of high-rise apartment buildings, local special circumstances, and underlying macroeconomic factors. As the country's economy continues to grow and more foreign investors enter the market, it is expected that the residential real estate market in Sri Lanka will continue to thrive.

Data coverage:

Figures are based on total and average value of residential real estate, residential estate transactions and leases.

Modeling approach:

Market size is determined by a combined top-down and 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 are considered at a country-specific level.

This report presents a comprehensive analysis and additional information on the Financial market, in a PDF format.

The global housing market has slowed amid high inflation and soaring borrowing costs. Homeownership is one of the most universal signs of success and prosperity: It serves both as a source of stable and secure housing and a long-term investment. After the global financial crisis, property prices rose in many countries and especially in advanced economies. For more than a decade after that, the housing market has been on an upward trajectory, culminating in the housing boom during the COVID-19 pandemic. However, housing shortages in highly competitive markets, the recent rapid house price growth, soaring inflation, and consequently, some of the highest mortgage interest rates recorded in the past 10 years have led to the market cooling.

Soaring inflation and aggressive mortgage interest rate hikes cooled the European housing market after a nearly decade-long period of growth. Since 2015, house prices in the European Union have grown by about 50 percent. When inflation in Europe started to rise at an alarming rate in 2021, the European Central Bank increased interest rates, resulting in substantially higher mortgage interest rates and a decline in homebuying. But how important is homeownership for Europeans?

Generally considered the third key pillar of the food, clothing, and shelter trinity popularized in India over generations, owning a home is still prioritized as a measure of financial security by a vast majority of the Indian population. The COVID-19 pandemic with its successive lockdowns and restrictions to stay within the confines of one’s home, further reinforced this vision. India’s growing urban population, rising household incomes, and decade-long low-interest rates have been propelling the demand for residential units, driving up the sales volume. Even though the residential real estate sector was severely hit in 2020, it marked a strong recovery in consecutive years, crossing pre-COVID sales figures.

Residential Real Estate - Sri Lanka

Value

Volume

Analyst Opinion

Transaction Value

Revenue

Household Type

Living Space

Methodology

Financial

Access more Market Insights on Financial topics with our featured report

Key Market Indicators

Explore more high-quality data on related topic

Global housing market - statistics & facts

Explore more high-quality data on related topic

Residential real estate in Europe - statistics & facts

Explore more high-quality data on related topic

Residential real estate in India - statistics and facts

Contact

Get in touch with us. We are happy to help.

Residential Real Estate - Sri Lanka

In-Scope

Out-Of-Scope

Related markets:

Residential Real Estate: market data & analysis

Financial

Access more Market Insights on Financial topics with our featured report

Explore more high-quality data on related topic

Global housing market - statistics & facts

Explore more high-quality data on related topic

Residential real estate in Europe - statistics & facts

Explore more high-quality data on related topic

Residential real estate in India - statistics and facts