Colombo land prices rise 4.6% in 2H: CB report

• Despite increase, overall price decline observed: CB 
• Land value indicator rises 2.5% for 2H of 2020 
• Residential land leads price hike with annual increase of 4.7% 

Land Valuation Indicator (LVI) for the Colombo District increased by 4.6% on year-on-year basis to 145.2 during the second half of 2020, the Central Bank (CB) said in its latest report. 

However, the percentage level of increase of LVI was in line with the declining trend observed over the recent periods. In addition, the LVI recorded an increase of 2.5% for the second half of 2020, compared to the first half of 2020. All sub-indicators of LVI, namely Residential LVI, Commercial LVI and Industrial LVI, contributed to the overall increase. Residential LVI recorded the highest annual increase of 4.7%, followed by Industrial LVI and Commercial LVI.

The Land Price Index (LPI) has been compiled from 1998-2008 on an annual basis and from 2009-2017 on a semiannual basis, covering five DS divisions in the Colombo District. Subsequently, from 2017 onwards, its geographical coverage was enhanced to represent all 13 DS divisions in the Colombo District and hence it was rebased considering the first half of 2017 as the base period. From 2020 onwards, LPI was renamed as Land Valuation Indicator (LVI) and continued to be released on a semi-annual basis. Per perch bare land prices are obtained from the Government Valuation Department on a semi-annual basis.

Methodology

Considering the diverse nature of land use, and the necessity of maintaining homogeneity, three sub-indicators for residential, commercial and industrial lands are computed separately for each DS division using the average per perch bare land price in the area. The LVI is the simple average of these three sub-indicators.