Real estate once again in wait and watch mode
KATHMANDU: Real estate developers are optimistic about growth in the real estate sector this upcoming fiscal. The realty sector, which was inclining after years of down turn, is expected to see normal growth. Although the transactions of housing and apartments has been stagnant after the earthquake, developers are still hopeful for the rise in demand for housing projects.
As the government is still in the process and yet to introduce new housing policies, developers are in wait and watch mode. Developers stated that the government policy on National Building Code (NBC), Building By-laws and zonation will decide the future of the realty sector. As per the Nepal Land and Housing Developers’ Association (NLHDA), of the total constructions housing developers hold only three per cent market share while 97 per cent of all houses are developed by individuals.
“The step that the government has taken to introduce a revised National Building Code is a positive decision.
We had these policies a decade ago but the government could not implement them,” said Minman Shrestha, Secretary of NLHDA. Citing that the earthquake has taught many lessons about the importance of abiding by policies, he said, “This is the right time to introduce and implement Building By-laws, NBC and zonation map strictly to manage urbanisation.” He further said that customers have already acknowledged the importance of community living and the demand will surely increase. According to him, mandatory provisions for six metre road access, structural analysis, seismic resistant structure, height restriction and zonation for residential areas should come into force for organised urbanisation.
Shrestha claimed that the products that developers offered are constructed according to NBC and by-laws which withstood the quake. “The real estate sector was in an inclining phase and had recovered by 35 per cent last year and we are hopeful that this coming fiscal year will also witness growth in the sector,” he asserted.
Developers stated that the realty sector will not face huge demand, however, with clear policies the attraction towards it will surely rise. “Post-earthquake people have realised that not only their houses but the surroundings too should be safe. More so because unsafe structures around your house may pose threat,” said Bijay Rajbhandary, Chairman of CE Constructions, adding that it will certainly attract people to community living where design, quality, height and other facilities are available 24/7. However, he said, “As the government is still to introduce new guidelines and policies for the housing sector, we are in a wait and watch phase for introducing new projects.”
According to Rajbhandary, the government’s policies will determine the development of the real estate sector. “Banks and financial institutions have liquidity surplus, however, it is yet to see how the government will address monetary policy.
Without assistance from banks, it will be a tough period for the real estate sector,” he said. Citing that the imposed construction ban created chaos in the industry earlier, he said, “The government needs to introduce practical policies being more farsightedness and transparent as it directly affects the price of products which ultimately puts pressure on the customers.” According to him, the price of properties will be increased by 15 to 20 per cent owing to hike in land price and approval cost.
Demand for standalone houses
The earthquake affected thousands of houses in the valley. According to NLHDA, developers have 1,000 units of standalone houses in ongoing projects and 4,500 units of apartments to be sold in 83 apartment projects. Developers stated that they have got maximum inquiries following the earthquake.
“People are gradually coming back to normal and inquiry for standalone houses have increased significantly,” informed Nischal Man Singh Pradhan, Chief Operating Officer at Brihat Investments. Stating that the inquiry for apartments is nil, he said, “Although apartment projects are structurally safe, people have not gained confidence about skyscrapers which will certainly take more time.” He said that due to the earthquake and situation that arose, people are attracted towards community living and housing projects. Citing that the demand for housing will grow significantly in the upcoming fiscal, Pradhan said, “As there are few developers in the industry, the supply of well managed housings will be in short supply.”
According to him, community living is gaining charm for its quality, design, open space, basic facilities such as water, electricity, transportation and others.