Colombo industrial land prices rise most in 3 years

• Budget proposes to do away with land and apartment ownership restrictions for foreigners
• Real estate developers hail the move
• Economists warn of negative consequences of spikes in housing price

Land prices in Colombo have been hotter than anywhere else in the island and as of late the prices have been growing at an exponential pace due to the pent-up demand for government and private lands created by various projects from commercial to luxury residences. 

The latest statistics by the Central Bank showed that the Colombo land prices for industrial purpose have risen by 14.6 percent during the first six months of 2017 against the comparative period in 2016, which marked the highest since 2015. The overall index, which captured the residential and commercial land prices, also rose by an average 12.6 percent year-on-year (YoY).

 Unconfirmed statistics showed that Sri Lanka’s land prices in its commercial capital Colombo grew at a compound annual growth rate of 20 percent since the end of the separatist conflict in 2009. This was due to a massive anomaly said to have been created by the former Rajapaksa administration in allocating government land facing the Galle Face promenade to Shangri-La Hotel Colombo at double the going rate at the time.