According to the latest Numbeo Property Investment Index, Sri Lanka’s commercial capital recorded a price-to-income ratio of 55.1, the highest among 395 cities surveyed globally. The ranking places Colombo ahead of traditionally high-cost markets such as Shanghai, Hong Kong and Mumbai, indicating that homeownership is now more out of reach for residents in Colombo than in many of the world’s most expensive cities.
The price-to-income ratio measures housing affordability by comparing median apartment prices with median household disposable income. Colombo’s figure suggests that a household would require more than 55 years of total income to purchase a standard apartment, assuming no other expenses. Kathmandu ranked second with a ratio of 39.2, followed by Manila at 35.9. Mumbai placed eighth with 33.3, while Singapore recorded a significantly lower ratio of 22.1.
The data points to deep structural imbalances in Colombo’s housing market, driven by a sharp gap between earnings and property prices. The average monthly net salary in the city stands at approximately Rs.70,452, while the average price of an apartment in the city centre is around Rs.108,442 per square foot. This means an entire month’s salary is insufficient to purchase even a single square foot of prime residential property. Outside the city centre, prices remain elevated at about Rs.36,238 per square foot, consuming more than half of an average monthly income.
Affordability pressures are further intensified by high borrowing costs. Mortgage interest rates for a 20-year fixed-term loan average 12.94 percent, compounding the challenge for middle-income earners. Analysts note that the market appears to be sustained largely by foreign buyers, expatriates, and a narrow segment of high-net-worth locals, rather than broad-based domestic demand.
The strain has also spilled over into the rental market. Average monthly rent for a one-bedroom apartment in Colombo’s city centre stands at Rs.131,386, nearly double the average net salary. Even a three-bedroom unit outside the city centre costs about Rs.112,200 per month, making independent living increasingly unaffordable for many residents.
While Colombo remains relatively inexpensive for foreign earners paid in stronger currencies, the property investment index underscores the severity of the affordability crisis faced by local households.
