KATHMANDU, MARCH 16
Real estate business that had been slow till last month as commercial banks have tightened loan disbursement to realty sector due to liquidity crunch, seems to be on the mend with 162,678 transactions recorded in the eighth month (mid-February to mid-March) of the current fiscal year.
A total of 74,036 properties (houses and land) were sold across the country in the review month, which was the second highest since the start of this fiscal, as per the latest data provided by Department of Land Management and Archive.
During this period, the government collected revenue worth Rs 1.96 billion from real estate transactions.
According to Ichchha Bahadur Wagle, the president of the Nepal Land and Housing Developers Association (NLHDA), the major reason behind the growth in the real estate business in the last month was the increase in people's savings. "Household savings have gone up in this period.
And in lack of other investment avenues, investors are intrigued to invest in real estate."
As the Nepal Rastra Bank (NRB) has tightened the provisions for loans to real estate industry citing liquidity crunch in the banking and finance sector, the business activities in the realty sector have stagnated.
As per the government data, 59,516 properties (houses and plots of land) changed hands in between mid-January and mid-February. Likewise, a total of 132,000 real estate transactions took place in that month.
Altogether 70,168 properties were bought and sold in mid-December to mid-January.
Despite an uptick in real estate activities across the country in the recent days, the realty business within the Kathmandu valley has decelerated.
According to the data of the Land Revenue Department, nine Land Revenue Offices in the three districts of the valley reported sales of only 5,536 properties in the eighth month of the current fiscal year, against 8,518 recorded in mid-January to mid-February. The total real estate transactions were recorded at 132,053 in the review month.
Meanwhile, as many as 8,387 houses and plots of land were bought and sold in the valley in the period from mid-December to mid-January.
According to NLHDA President Wagle, the main reason for the slowdown in the property market in the valley is the skyrocketing prices. "The booming prices mean buying property within the Kathmandu valley is simply out of reach for most people," he said.
Citing an example of the overheated market, he said, "The average price of land in Bhainsepati one-and-a-half years ago was Rs six million per aana. Now, it ranges between Rs 10 million and Rs 15 million per aana."
A version of this article appears in the print on March 17, 2022, of The Himalayan Times.