In 2026, Colombo has earned an unwelcome global distinction: it is now officially the most unaffordable city in the world for its own residents to buy property.
According to the latest Numbeo Property Investment Index, Sri Lanka’s commercial capital recorded a staggering price-to-income ratio of 55.1, the highest among 395 cities worldwide. In simple terms, this means an average household would need more than 55 years of its entire income with no spending at all to buy a standard apartment. No other city on the list comes close.
This places Colombo ahead of global property pressure-cookers such as Shanghai, Hong Kong, and Mumbai, making homeownership statistically more distant for Sri Lankans than for residents of many famously expensive cities. Kathmandu follows far behind in second place with a ratio of 39.2, while Manila stands at 35.9. Mumbai ranks eighth at 33.3, and even Singapore often associated with luxury real estate records a comparatively lower 22.1, making it mathematically more attainable for locals than Colombo is for its own people.
At the heart of this crisis is a dramatic mismatch between what people earn and what homes cost.
The data shows that the average monthly net salary in Colombo is about Rs.70,452. Meanwhile, the price per square foot of an apartment in the city centre averages Rs.108,442. In effect, an entire month’s salary cannot buy even a single square foot of prime residential space. Outside the city centre, prices ease but remain punishing around Rs.36,238 per square foot, still consuming more than half of an average monthly income.
Buying property is further complicated by the cost of borrowing. Mortgage interest rates for a 20-year fixed loan average 12.94 percent, adding another heavy layer to an already unreachable market. Together, high prices and double-digit interest rates have pushed the middle class almost entirely out of the homeownership equation.
As a result, Colombo’s real estate market appears increasingly detached from local demand, relying instead on foreign investors, expatriates, or a small group of ultra-wealthy local buyers to sustain prices.
The strain has spilled over into the rental market. A one-bedroom apartment in the city centre rents for about Rs.131,386 per month, nearly twice the average net salary. Even a three-bedroom apartment outside the city centre costs around Rs.112,200. For many workers, living independently in Colombo is no longer realistic, forcing shared housing arrangements or long commutes from distant suburbs.
Ironically, while Colombo continues to rank as a cost-effective city for foreigners earning in stronger currencies, the property investment index reveals a very different reality for locals one of extreme housing inflation and shrinking access to the city they work in.
In 2026, Colombo may still be growing upward with cranes and towers but for the average citizen, the door to homeownership has never felt further away.
(Source - lankanews.lk)
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