Himalayan News Service

Kathmandu, June 28:

The career of housing industry in Nepal has been a precocious one. In the short span of eight years, no less than 20 real estate developers are fighting for this lucrative piece cake. Rise in the number of migrants due to insurgency from outside the valley, an increasingly busy middle class urban population and the ever-growing need of accommodation have all conspired to give a huge thrust to the housing business in recent times. Housing boom has also been kindled by a rising investor dependence on safer, albeit smaller projects. Most banking and financial institutions have also followed suit. At a time when the country is being dragged down by political instability and development projects have come a virtual stand still, investors have found this new avenue of investment lucrative and dependable. “An apartment that we sold for Rs 1.2 million in our first phase three years ago, costs Rs 2.2 million at

present,” says Dilip Neupane, marketing manager at Oriental construction and Development, the builders of Sunrise homes. “It is a safe investment.”

Raju Kumar Siwakoti, managing director of Jawalakhel Real Estates and Housing Company Ltd agrees, “Investments made on land or housing estates can hardly run into losses.”

Increasing space constraint within the city limits has ensured that most housing colonies today are being built beyond the Ring Road. Areas for building these housing colonies are being chosen according to their access to the city. But some, like the Sunrise Homes have been built inside the Ring Road. Housing companies in Kathmandu have scored huge successes with sales and bookings for apartme-nts and individual houses. “We have sold out the first phase of Sunrise Homes, which had 28 individual houses and 88 apartments, comprising of two, three and four bedrooms,” Neupane says. “In our second lot which has 29 bungalows and 20 apartments with one and two bedrooms, we have only five apartments and four bungalows left for booking.”

Despite the media hype and extensive marketing drives by concerned companies, some consumers continue to think housing companies are selling expensive houses. “I can build a three bedroom home on five annas of land for lesser amount of money than what the developers are asking for the smallest individual house,” says Pankaj Bhandari from Lazimpat.

But a number of others see many plus points in what the developers have to offer. Anand Silwal, a tourism entrepreneur, who has purchased a house built by Comfort Housing at Sitapaila says that security is the main reason which has lured him to buy a house here. Though it is expensive, according to him, it is worth the money, particularly keeping in mind the services being provided by the housing company. On top of it, he adds, the community here is good and people of high standard live in such colonies. “This also keeps me away from facing the troubles of construction. In my opinion, it is cheaper to buy such a house than to build one if one’s tears and toils to build a house oneself is taken into account,” Silwal adds.

The other factors fuelling the housing boom are housing loans and customised consumer finance schemes being offered by commercial banks and financial institutions. Lately commercial banks have come up with housing loans that have helped even middle-class consumers realise their dreams. Easy equal monthly instalments (EMI) for repaying loans taken from banks or financial institutions have allowed even fence-sitters to make up their minds. Interest rate on housing loans available today varies from a minimum of 6.99 per cent to 15 per cent. The consumer loan product market has never been so competitive. Housing loans targeted towards salaried individuals, who not necessarily occupy managerial posts, but have a regular income source of double than the EMI amount, have helped consumers realise their dreams of owning a house. “Due to a low risk factor and good returns, most banks have decided to opt for the home loan segment,” says, Lokendra P N Pradhan, chief manager at the Lumbini Bank.

These loans ensure that you are not burdened to pay a huge amount at one go. The payment is spread over the tenure opted for following a mutual understanding between the consumer, the housing company and the bank. With innovation being the name of the game, consumers have emerged as the major gainers. Apart form the monetary aspect, better residential environment, better facilities like assured water supply, proper sewage system, garbage disposal, road alignment, electricity supply, medical store, fitness centre, children’s park and department stores inside a colony is taking the concept of urban dwelling to the next level. Promise of a better security inside the colonies has proved to be one of the major draws for consumers. Most housing estates claim to offer 24-hour security, treated water supply, beauty parlour, fitness centre, department store and electricity back-up. “We try to make life comfortable at Sunrise homes,” Neupane says about his project.

For further improvement in the fortunes of housing estates in Nepal, it is of crucial importance that a more proactive and imaginative government intervention is in place.

“Change in building by-laws that were formulated some 12 years back need timely change, as times and necessities of totay;s society has changed. We need a policy, a vision that will take care of our urban needs for about fifty years to come,” says Om Rajbhandary, chairman and CEO of Comfort Housing. Industry insiders reveal that the draft of a Real Estate Act and Apartment Act is nearing completion and which is likely to come into practice very soon.