What land for sale? A little joke. But anyone who’s kept an eye on property for sale in Ahangama in recent years and decided now’s the time to buy may be feeling a little miffed.

There has been a boom (in a Sri Lankan sense) in the real estate market in and around Ahangama over the last 18 months (we’re writing this in mid-2024), really a function of savvy and creative hospitality operators moving in and creating a unique “vibe” (as they’d describe it) and product (as they wouldn’t) in this once-sleepy fishing village mid-way between the older hotspots of Galle and Mirissa.

So, with buyers piling in and land plots going fast, how have prices shifted? On the beach, as ever, price shifts have been sharpest. Pre-Covid beach land in Ahangama was transacting (and not that often) for around LKR 1 million per perch - at a pre-slip exchange rate that meant a quarter acre (roughly 1,000 square metres) for around USD 200,000.

Now you’ll struggle to find anything for under LKR 4m per perch and we’ve seen some Ahangama beachfront plots listing at LKR 6m per perch. Assume an average then of LKR 5m per perch for good beachfront land in or close to the town and that’s a USD price tag of just over 650,000 for a quarter acre.

And as prices have gone up on the beach so too have sellers inland started to smell the coffee and adjust expectations. As per beachfront land in Ahangama, many of the prime smaller plots (rice-paddy facing land, gorgeous antique houses) have been snapped up and pricing for what remains is in the region of LKR 500,000 per perch for anything under 40 perches (a quarter of an acre).

There’s a dearth in supply right now at the mid-range - land for sale around 1-2 acres - but there are larger plots 6 acres or more, and we see pricing on these around LKR 200,000 per perch.

Having said all the above, despite a real pick-up, this is still not a hard-and-fast, efficient market with easily accessible market pricing data and so there are anomalies and opportunities. Keep a close eye and be in touch with us to have visibility on those.

There was a time - not all that long ago - when, if you even bothered to head eastward of the bar at Wijaya Beach you’d hit the road and keep your head down until, at the very least, Mirissa. Not so now.

Post-Covid, the formerly bypassed villages of Kabalana, Ahangama, and Midigama have come to life and now, led by Ahangama itself, they are the toast of the Sri Lankan hospitality and real estate development scenes. Why’s that?

First and foremost, people started to realise the depth and spending power of the surfing crowd. There’d been surf spots along this strip for years, of course, but all pitched at a pretty traditional, relatively cheap end of the market. Whether it was Covid driving a more experience-hungry and health-conscious tourist (ones taking up surfing) or perhaps a slight Bali-fatigue pushing former Indonesian visitors our way, the surf-hospitality market has upped its style game hugely around Ahangama with places like The Palm, Soul and Surf and Abode.

The creations of those early-movers have caught the imagination of (many) others and there’s been snow-balling of investment demand for land and property in Ahangama as a consequence. And as the boutique hotels and villas have sprung up, so too have the services and facilities that make the experience all-the-better for their guests. You’d argue now that, in season, the food and beverage scene in Ahangama outdoes that of Colombo in quality and variety.

As that momentum built up, plots on or close to the beach got taken and people started looking inland. And at that point it became clear that, as well as gorgeous golden beaches, Ahangama boasts some of the loveliest inland real estate (apologies for an ugly phrase) in Sri Lanka. Unspoilt lands overlooking lush rice-paddy, untouched jungle and hilltops with supreme views to the ocean all came to market as sellers began to realise an opportunity to cash-out.

How long the buzz lasts requires some speculation but we’re of the view that such is the mass of investment in property in Ahangama that the commercial upside for further development is strong enough to make up for higher price tags to buy in.

That’s an extremely leading question of course to which the answer is…that depends.

Property in Ahangama and nearby has seen a surge in demand in the last two years and prices have risen accordingly. There’s likely still some way to go in pricing - we are not Bali just yet - but anyone looking to invest in real estate in Ahangama will have to think very carefully about what they want from it and how they’ll be looking to generate a return; what could have been a simple value investment three years ago probably doesn’t stack up so easily now.

That said, the momentum in Ahangama property and the mass of visitors the town sees means that any smart commercial development could provide strong income. We’re seeing a slight flattening of the seasonal pattern - although still a factor - and anecdotally the boutique hotel and villa owners we talk to and speaking very buoyantly of occupancies in the season just gone and the rates they were able to maintain.

If you’re looking to create a revenue-driving business and the typical Ahangama market suits the concept then, numbers-wise, there’s probably nowhere better on the island. If you’re looking for quieter, longer-term value appreciation then other spots may suit better.