KATHMANDU, JULY 17

The recently introduced Land Use Regulation 2022 has dented the real estate market, with only 47,028 properties (houses and land) sold across the country in the one month period between mid-June and mid-July.

The latest data provided by the Department of Land Management and Archive shows realty transactions in the review month was second lowest in the fiscal year 2021- 22, after slight recovery seen in the month before. Altogether 54,514 houses and plots of land were bought and sold across the country in between mid-May and mid-June.

According to real estate businessmen, the trade has been affected as the Ministry of Land Management, Cooperatives, and Poverty Alleviation (MoLMCPA) has introduced the new regulation that is unfavourable to the realty sector.

Alleging that the government lacks any specific plan to implement the regulation, Bidhur Dhamala, acting president of the Nepal Land and Housing Developers Association (NLHDA), said, 'Plotting of the land has pretty much come to a standstill since the new rules were implemented.'

As per the new regulations, land has been categorised as agricultural zone, residential zone, commercial zone, industrial zone, area of mines and minerals, forest zone, public use zone, area of cultural and archaeological importance, and others being based on topographic features, efficiency and utility of land, its existing use and necessity.

The regulations prohibit the commercial land plotting and its sale in areas except in classified areas for residential purposes.

According to Janak Raj Joshi, spokesperson for MoLMCPA, blamed the dilly-dallying on the part of the local governments to carry out the classification of land for dampening the property market.

'Except for a few, most local governments have not initiated the process for classification of land, which in turn has also halted plotting and other realty activities,' he explained.

Meanwhile, although the number of properties traded decreased by 7,489 in the review month, the revenue collection was encouraging compared to previous month.

As per the government data, the government collected revenue worth Rs 6. 11 billion from real estate transactions in the review month, compared to Rs 4.24 billion in the previous month. Even though the transactions had dropped to their lowest level for this fiscal in between mid-April and mid-May, the government had collected revenue worth Rs 4.78 billion from real estate transactions that month.

The property sales in the Kathmandu valley were not affected in the review month. According to the data of the Land Revenue Department, nine Land Revenue Offices in the three districts of the valley reported sales of 7,297 properties in the review month against 5,763 properties in mid-May to mid-June.

As per the department, the highest number of property sales was from the Land Revenue Office (LRO) Lagankhel, with 1,756 land and houses bought and sold. Likewise, 1,676 properties were sold and bought from LRO Bhaktapur, 1,079 from LRO Kalanki, 928 from LRO Sankhu, 675 from LRO Chabahil, 477 from LRO Manamaiju, 398 from LRO Dilli Bazaar, 283 from LRO Tokha and 25 from LRO Gotikhel.

A version of this article appears in the print on July 18, 2022, of The Himalayan Times.