Colombo: Land prices in Sri Lanka’s capital, Colombo district have risen by a sharp 16.3 percent during the first half of 2018 from the same period in 2017 with the biggest increase seen in the commercial land of the region.
The Land Price Index measured bi-annually by the Statistics Department of the Central Bank showed the overall index value rising to 116.3 for the first half of 2018 from the base period of first half of 2017.
The Colombo district land prices index covers data from 82 centres covering all divisional secretariat divisions in the Colombo district given the region’s increasing importance in its real estate sector.
Double digit growth in land prices within a matter of 12 months indicates a hotter real estate sector in the
Colombo region.
The conclusion of the Colombo Financial City could also send Colombo mainland land prices further higher.
Extremely higher valuation of certain government-owned land parcels in the heart of Colombo during the previous administration for commercial purposes sent the Colombo lands prices skyrocketing, and as a result some land owners in Colombo saw their wealth shooting up overnight.
Some analysts say the extremely high land prices are an obstacle for private investments.
Meanwhile the Colombo Land Price Index measured Colombo residential land prices grew 16.5 percent from a year earlier and the commercial land prices by 16.8 percent – the sub-category with the highest increase in prices.
Meanwhile the industrial lands in Colombo have risen by 15.8 percent during the first half of the year from the same period in 2017.
Higher land prices in Colombo has already shifted people from horizon living in to vertical living as many high rise apartments are mushrooming in and around the city targeting the growing upper middle income city dweller.
The Central Bank tightened the policy since mid 2016 to cool off a possible bubble in the Colombo property market, especially in the luxury segment.
However the developers say such fears are unfounded and they find ample demand for their units.
However there is still a dearth in affordable housing in Colombo and the suburbs which the government and the private sector are working hard to fix.
