Land values in Colombo District increased by 5.9% year-on-year in the first half of 2026, with residential properties leading gains at 6.7%, according to Central Bank data. The pace of growth has slowed significantly from the double-digit increases recorded in 2025.

The Central Bank of Sri Lanka's Land Valuation Indicator (LVI) reached 271.6 in the first half of 2026, up from 256.4 a year earlier, reflecting moderate growth across all three property categories tracked by the central bank. Residential land values performed strongest with a 6.7% year-on-year increase, followed by commercial land at 5.7% and industrial land at 5.2%.

The deceleration in growth marks a notable shift from 2025, when the headline LVI recorded double-digit annual increases of 11.4% in the first half and 10.6% in the second half. Residential land saw the most dramatic slowdown, declining from 14.4% annual growth in the first half of 2025 to 6.7% in the corresponding period of 2026. Despite this moderation, sequential comparisons show continued momentum in the property market, with residential values rising 4.3% compared to the second half of 2025, while industrial and commercial land increased by 3.6% and 3.2% respectively.

Since the end of 2023, Colombo's property market has recovered substantially from the economic crisis period. The headline LVI now stands nearly 24% above its end-2023 level, with residential land leading the recovery at 29% growth since that point. This recovery represents a marked departure from the crisis-driven surge seen in 2022-23, when the LVI climbed 14.8% in the second half of 2022 and 15.2% in the first half of 2023. The Central Bank compiles the LVI using bare land prices from the Government Valuation Department across all 13 Divisional Secretariat divisions in Colombo District.