Land prices in Sri Lanka’s Colombo District increased by 7.7% in the second half of 2024 compared to a year earlier, according to the Central Bank of Sri Lanka’s (CBSL) Land Valuation Indicator (LVI). However, the rate of increase was slower than in the first half of the year.
Residential land recorded the sharpest rise, up 9.9%, followed by commercial land at 9.4%. Industrial land prices saw a more modest increase of 3.9%. The Central Bank noted that price increases across all categories decelerated in the latter half of the year compared to the first six months.
The LVI is based on per-perch bare land prices obtained from the Government Valuation Department and tracked semi-annually since 2009. Originally launched as the Land Price Index (LPI) in 1998, it expanded to cover all 13 Divisional Secretariat divisions in Colombo District in 2017 before rebranding as the LVI in 2020.
The slowdown in price growth suggests a possible shift in market dynamics. Factors such as tighter monetary conditions, reduced speculative activity, or adjustments in demand from businesses and homebuyers may influence the trend. If this moderation continues, it could indicate that the property market is cooling. However, sustained demand for residential and commercial land suggests that prices are unlikely to decline soon.