Property Demand: Galle vs Colombo

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By 2017-11-15

Lamudi, a global property portal launched in 2013 that focuses exclusively on emerging markets, recently published via press release the results of its studies on the real estate markets in Colombo and Galle. The statement is reproduced in full below.

There is little argument that both Colombo and the city of Galle are two of the most developed urban regions in Sri Lanka. What is significantly common about these two regions is that they are not just economically developed, but also highly celebrated travel destinations that offer so much for local and international travellers.
As such, these regions attract a large number of property hunters who seek high-end residential or commercial properties in or near these two cities.

The real estate market in Colombo
Being Sri Lanka's most developed city, Colombo is home to the widest variety of properties found anywhere in Sri Lanka, spanning luxury and mid-range apartments, studio apartments, luxury and mid-range houses, and high-end and affordable commercial spaces. Its growth in infrastructure, technology and economy has resulted in many investment projects, including the Colombo Port City, which draws its first investment of US$ 1 billion in mid-2018.

As a result of the above, when compared to other regions of the country like Galle, Colombo indicates the highest demand for properties that correlates with its increasing prices. Hence, residential properties in Colombo are constructed to offer the most comfortable life within the city.

According to Lamudi research, vertical living, introduced to Sri Lanka not so long ago, is gaining popularity within the commercial capital in comparison to cities like Galle. Thus, at present, a property hunter is given a plethora of options, such as Altair, Iconic Galaxy, Capitol Twin Peaks and many more.

Colombo shows the highest price levels in comparison to other cities, especially for luxury apartments and modern houses. Additionally, an increase in land prices was also observed in the city of Colombo over the recent past. Currently, average luxury apartment sale prices range between Rs 60 million-Rs 100 million. Luxury houses with a minimum of 2 bedrooms indicate an average sale price of Rs 10 million-Rs 50 million. The rental prices for commercial spaces in Colombo indicate an average price between Rs 50,000-Rs 100,000 per month. However, price levels for such properties vary according to consumer requirements, facilities offered, locations and the area of the space.

However, the future of Colombo's real estate market will largely depend on the infrastructure developments expected from the proposed Western Region Megapolis Planning Project (WRMPP).

The real estate market in Galle
According to Lamudi's in-house Real Estate Market Report of Sri Lanka for 2017, the city of Galle has been recognized as one of the fastest emerging metropolitan regions in the country for luxury properties. Real estate agents in the region have also indicated that the demand for such properties seems to be growing at a stable rate for the past few years. Thanks to its strategic positioning, Galle is currently attracting many foreign investors looking to leverage the Galle Marina and experts believe that many job opportunities can be created through luxury yacht building and marina development. One of the main factors that contribute to the growing real estate industry within the city is its tourism value. Thanks to developments like the Weligama Bay Marriott Resort & Spa, Fairway Galle, Amary Galle, Galle Beach Hotel, and infrastructural developments like the Galle Port, the city now offers a variety of properties, including many short-term rental options.

Property prices in Galle are low in comparison to Colombo. Yet price levels have been increasing steadily since the end of the 30-year civil conflict. Currently, luxury apartments for sale start at Rs 30 million. While long-term rental prices for luxury villas range from Rs 50,000-Rs 100,000 per month, monthly rental prices for luxury houses may range from Rs 10,000–Rs 50,000, depending on the facilities included.

Nevertheless, the future of Galle seems to be a greener one. Due to its regional economic growth credited to the tourism industry, Galle may become the location of high-end properties with developments such as Fairway Galle, focusing on a more sustainable future.

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