An Empirical Study on the Determinants of Residential Land Prices in Sri Lanka: Evidence from Land Sales Companies

Abstract

With the continuous rise in population and rapid urbanization in recent decades, the demand and value of residential land in Sri Lanka have significantly increased. However, the pricing of such lands have shown inconsistencies, raising concerns among buyers, developers, and policymakers. Despite the importance of this issue, limited empirical research has examined the determinants of residential land prices in the Sri Lankan context. This study aims to identify the key factors influencing the price of developed lands intended for residential use, particularly those sold by land sales companies. The research adopts a quantitative approach, primarily focusing on quantitative analysis. Survey data were collected using a purposive sampling method from 179 individuals who had purchased developed land from a leading land sales company that has sold over 1,500 plots. This company was selected as the sampling frame due to its significant market presence and extensive customer base, which provided accessible and relevant respondents with direct experience in land purchasing. The study evaluates the impact of five categories of factors: Location, Legal and Regulatory frameworks, Development, Environmental aspects, and Economic conditions on land prices using multiple regression analysis. Results reveal a strong explanatory power (R² = 0.790), indicating that 79% of the variation in land prices can be attributed to the selected variables. . These findings offer valuable insights for land sales companies, investors, policymakers, and prospective buyers by enhancing their understanding of price determinants in the real estate market.