Land has become the most easily tradeable commodity, fetching instant high prices without having to do much hard work
After witnessing a slump for some time, the real estate business is showing signs of improvement. A total of 74,036 houses and plots of land were sold across the country in the eighth month of the current fiscal year, or mid-February to mid-March period, which was the second highest during this fiscal. Real estate business has never let the people of this country down, and has always kept booming even when all other sectors of the economy were in poor health.
But it had slowed down till last month since the start of the new fiscal year after banks and financial institutions tightened loan disbursements to the realty sector due to the liquidity crunch being faced by them. The upward trend in buying and selling of properties last month is attributed to an increase in people's savings and lack of investment opportunities in other avenues. However, with the war between Ukraine and Russia pushing up the price of oil, food and metals globally, it needs to be seen if the tempo seen in the realty sector will be maintained.
Although realty business activities have picked up across the country, the Kathmandu Valley, which holds the most coveted land in all the country, has not shared the same enthusiasm. The three districts of the Kathmandu Valley reported sales of only 5,536 properties in the eighth month of the current fiscal as against 8,518 recorded the previous month, according to the Land Revenue Department. From mid-December to mid-January, some 8,387 houses and plots of land were bought and sold. You do not need to do a heavy analysis to figure out why property transactions in the valley are decelerating – land prices are simply beyond the reach of most people.
With land getting more and more scarce in the valley, its price has doubled in the past two years, with an anna of land (342 square feet) in an upmarket area fetching above Rs 10 million. A plot of land in places like New Road or Thamel already costs more than in some of the trendy places in the US.
While a booming realty sector is good for anyone with a plot of land to sell or the brokers, it has come at a cost. Concern has been raised about the severe negative impacts land acquisition of especially productive agricultural land are having on agriculture, food security and on the environment. In the absence of any land use planning, small land acquisitions for building homes have turned the once green Kathmandu Valley into a concrete jungle, an eyesore that is being replicated in all big and small towns across the country. As land has become the most easily tradeable commodity fetching instant high prices without having to do much hard work, it is becoming extremely difficult to pool large tracts of land for industry, farms and large-scale housing projects. Unless the government steps in to regulate the realty sector with a land use policy that is implementable and heavy taxation, it will not free up land for the productive sector or make housing that is affordable to most of the people. Why should a house cost the life savings of a family simply because land prices are being inflated by the middle men? The government cannot stay indifferent to what is taking place right under its nose.
Expedite the work
It has been nine months since the headworks of the multi-million dollar Melamchi Drinking Water Project was damaged after being buried under debris and sediments due to heavy landslides upstream of the project during last year's monsoon. Several bridges and the road leading to the project area were also destroyed, leaving scores of people dead in the area. The government has recently been able to rebuild a bridge that has eased transportation to the area.
While inspecting the project the other day, Minister of Water Supply Umakanta Chaudhary instructed all concerned agencies, including the contractor company, Sinohydro, to remove the debris from the headworks so that drinking water can be resupplied to the Kathmandu Valley by mid-April. The contractor company is learnt to have urged the government to pay its dues on time. Delay in payment to the contractor means delay in completing the national pride project. The contractor has so far removed 70 per cent of the rubble piled up in the area. With the onset of the dry season, the denizens of the valley are already facing an acute shortage of drinking water. The government should also come up with a long-term plan of stabilising the mountains upstream of the headworks.
A version of this article appears in the print on March 18, 2022, of The Himalayan Times
