Colombo has been ranked as the most unaffordable city in the world for homebuyers in 2026, highlighting a sharp disconnect between property prices and local wages.
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 worldwide. This indicates that, for the average resident, purchasing a home in Colombo is statistically more difficult than in cities such as Shanghai, Hong Kong, or Mumbai.
The price-to-income ratio measures housing affordability by comparing median apartment prices to median household disposable income. Colombo’s ratio of 55.1 suggests it would take over half a century of a household’s entire income to buy a standard apartment, assuming no other expenses. For comparison, Kathmandu ranks second at 39.2, Manila third at 35.9, and Mumbai eighth at 33.3. Even Singapore, often considered an expensive city, has a ratio of just 22.1.
The core issue behind Colombo’s ranking is the wide gap between average earnings and property costs. The average monthly net salary in Colombo is approximately Rs. 70,452, while the price of an apartment in the city centre averages Rs. 108,442 per square foot. Outside the city centre, prices remain high at Rs. 36,238 per square foot, consuming more than half of an average monthly wage.
Financing costs further worsen affordability, with 20-year fixed mortgage rates averaging 12.94 percent. As a result, middle-class households are effectively priced out of the market, leaving real estate demand to foreign investors, expatriates, and a small segment of ultra-high-net-worth locals.
This unaffordability has pushed pressure onto the rental market. A one-bedroom city-centre apartment rents for around Rs. 131,386 per month—almost double the average monthly salary. Even a three-bedroom unit outside the city centre commands Rs. 112,200 per month, forcing many residents to rely on shared housing or commute from distant suburbs.
While Colombo may remain attractive to foreign investors earning in stronger currencies, the property investment index underscores a severe affordability crisis for local income earners.
