5 March 2018 09:44 am
The surge in land prices in Colombo slowed down marginally in 2017 after recording sustained growth for over one and a half years, according to the Central Bank’s Land Price Index (LPI).
The index, compiled for the latter half of 2017, grew by 10.4 percent year-on-year (YoY) by the end of December. The lowest growth was seen in the residential sector with 9.7 percent YoY. Commercial land prices increased 11.2 percent YoY, while industrial land prices increased 10.1 percent YoY.
The index uses data collected by the Valuation Department covering 50 centres of the five Divisional Secretariats of Colombo, Dehiwala, Kesbawa, Homagama and Kaduwela.
The biannually compiled index had grown at above 12.5 percent since the end of June 2016, after recording a growth of 14.5 percent at the end of December 2015.
There had been speculation of a bubble forming in the real estate and construction sector in 2017.
The Central Bank had provided some moral suasion to rein in exuberance in the market, before the government had to resort to the market correcting measures it had promised to implement in its correspondence with the International Monetary Fund.
The Central Bank has since said that it made the remarks after it saw the market slowing down on its own, and that there was a low possibility of a bubble based on the exposure of the financial sector to the real estate and construction industries.
The Central Bank had provided some moral suasion to rein in exuberance in the market, before the government had to resort to the market correcting measures it had promised to implement in its correspondence with the International Monetary Fund.
The Central Bank has since said that it made the remarks after it saw the market slowing down on its own, and that there was a low possibility of a bubble based on the exposure of the financial sector to the real estate and construction industries.