The Sri Lankan land market experienced solid growth in 2025, with the suburbs of Colombo and districts within the Western Province emerging as pivotal contributors, as per the updated Land Price Index (LPI) 2025 published by LankaPropertyWeb (LPW). The index for 2025 indicates that land prices per perch in Colombo 1–15 rose by 4% year-on-year, reaching LKR 12 million, while the suburbs of Colombo witnessed a more robust growth of 8%, averaging LKR 2.3 million per perch. In the broader Western Province, Gampaha District saw its average land price per perch increase by 15% to LKR 769,097, and Kalutara District experienced a 10% rise, reaching LKR 486,396.
Suburban and Emerging Areas Lead Price Growth
The report underscores a significant shift in investor interest towards suburbs and emerging towns that offer substantial development potential and affordability. This recent surge in land prices has been largely driven by new residential projects, ongoing land sales, and improvements in local infrastructure over recent years. Yakkala in Gampaha emerged as a standout performer with a 35% increase in prices to LKR 831,015 per perch, closely followed by Homagama in the Colombo suburbs at LKR 916,912 per perch, reflecting a similar 35% rise. This trend has attracted investors looking for residential land in these suburbs. In Gampaha, Negombo recorded a 35% rise to LKR 1,561,925, while Bandaragama in Kalutara grew by 34% to LKR 545,533. Within Colombo’s suburban belt, Piliyandala saw a 30% growth to LKR 1,222,181 per perch, with Kaduwela, Pannipitiya, Moratuwa, and Nugegoda all experiencing gains exceeding 25%, signaling sustained investor demand.
The LPI data for 2025 indicates that the most significant price appreciation has occurred in areas connected to urban infrastructure improvements and new development projects. Central Colombo areas exhibited more moderate growth, with Colombo 10 seeing a 25% increase to LKR 14,589,277 per perch and Colombo 4 rising by 17% to LKR 18,870,504. In contrast, areas such as Colombo 6 and Colombo 13 showed minimal gains.
Long-Term Growth Trends Highlight High Returns in Suburbs
Examining longer-term trends from 2020 to 2025, several locations outside main cities have witnessed remarkable appreciation. Ingiriya in Kalutara led the five-year growth chart, with the average land price per perch increasing by 322% to LKR 344,850. Padukka in the Colombo suburbs followed with a 221% rise to LKR 387,628, while Ragama in Gampaha grew by 183% to LKR 1,121,599. Dompe, also in Gampaha, recorded a 143% increase to LKR 289,250 per perch, and Bandaragama in Kalutara appreciated by 130% to LKR 545,533. Other high-performing suburban areas, including Moratuwa, Kaduwela, Piliyandala, and Hokandara, demonstrated strong cumulative gains over the past five years, underscoring the growing appeal of affordable land for sale in the suburbs.
According to LPW, this upward trend reflects a shift in buyer preferences towards well-connected, affordable suburbs with strong development prospects. The report noted, “Investors are focusing on areas that combine accessibility with value, driving robust growth in Gampaha, Kalutara, and Colombo’s suburban belt.”
