Prefabricated volumetric modular building construction is an emerging technology in many countries used to develop the construction industry through its value-added benefits. The adoption of these novel technologies in the Sri Lankan construction industry has been relatively slow compared with other developing countries, delaying the development of the construction industry and the attainment of the added benefits of these technologies. Therefore, this study aims to identify the suitability of modular construction for the Sri Lankan construction industry via a survey and case study. A questionnaire survey was developed and distributed to assess and identify the benefits of implementing the concepts and constraints in Sri Lanka. Then, the construction cost of a proposed single-story house delivered through conventional and modular practices was compared. The survey results showed that introducing a modular concept to the industry is suitable and would benefit the Sri Lankan construction industry. Further, survey participants believed that the economic benefits brought in by modular construction are significantly more important than environmental and social benefits when selecting modular construction. The case study on a single-story affordable modular house showed a 32% reduction in total construction costs and a 36% reduction in labour costs compared to conventional house construction. Further, costs for total modular construction and labour were 32% and 36% less than those of conventional construction costs and labour costs. Moreover, a 16% reduction in embodied energy was observed when compared with conventional construction. Therefore, the modular concept could be used to construct affordable houses and will be cost-effective with the correct choice of material.