Land prices up 25 % in Colombo, suburbs
View(s):Land prices in and around Colombo have seen a near 25 per cent rise over the past few months and after the November budget, industry analysts say. With the low interest rates that prevailed during the year followed by currency depreciation, there was a natural increase in asset prices which was supplemented, according to them. “This was what was seen during the past 18 months and there was a high dmand for land. Colombo high end residential property has experienced a boom during this time,” an analyst added, noting that Colombo land prices have increased by about 25 per cent.
Next year’s budget proposed to remove the tax imposed on the leasing of land to foreigners and also to consider the removal of restrictions on ownership on identified investments imposed through the Land (Restrictions on Alienation) Act. There’s also a proposal for foreigners to borrow 40 per cent of their investment in condominiums from banks in local currency.
Some analysts say that land prices have gone up due to the scarcity of land. “After the budget foreigners can purchase land without paying 100 per cent stamp duty on a 99 year leasehold basis. This has given an impetus for price increases in lands,” another analyst said.
He added that this has made sellers jack up the land prices in anticipation that foreigners will buy.