Western Province land prices drop; RIUNIT signals market rebound

Friday, 5 July 2024 03:28 - - {{hitsCtrl.values.hits}}

The Research Intelligence Unit (RIUNIT), an international research and consulting firm (RIUNIT) has reported a notable dip in average land prices in the Western Province, marking the first decline in the 20 years it has tracked the market.

Typically, land scarcity in island cities like Colombo creates constant upward pressure on land values. Even during Sri Lanka’s civil conflict, land prices in Colombo continued to rise.

However, in the first quarter of 2024, land prices fell in many Western Province suburbs, alarming industry experts.

RIUNIT CEO Roshan Madawela said: “Thankfully the downward trend seen at the start of the year has now turned and what we are now observing is a return to the long-term average property price increases that Colombo and the Western Province has traditionally enjoyed.”

“The dip can be largely attributed to multifarious factors that were essentially spurred by the economic crises and the subsequent IMF reforms.” He adds that foremost was the sudden increase in the number of properties available on the market from sellers keen to migrate or send their children overseas. “Others were distressed sales from individuals and SMEs who bore the brunt of the economic mismanagement and the IMF reforms that followed.”

Statistically, the number of passports issued and the number of people at all skill levels who left the sunny shores of Sri Lanka can certainly support what RIUNIT has observed being reflected in the real estate market.

“The good news is that this trend seems to now be behind us,” Madawela said. Moreover, the authorities have also published data that the exodus of professionals and workers leaving the island is also slowing down in 2024. Analysts at RIUNIT have further noted that the return in tourism numbers also serves to underpin the property market across the entire island and is also helping to bring apartment rental yields back towards pre-2019 levels.

The Research Intelligence Unit is a multi-sectoral consulting firm and research house with a 21-year presence in Sri Lanka. The company is a market leader in multiple sectors and has steadfastly supported development in Sri Lanka as well as other emerging markets.