Real Estate Transactions Experience Significant Decline in FY 2079/80

In the last financial year 2079/80, there has been a significant decline in real estate transactions. According to the Department of Land Management and Archive, the purchase and sale of land decreased by about 38 percent due to the slowness in real estate transactions.

In the financial year 2078/79, around 745,000 documents were processed for real estate transactions, but in the last FY 2079-80, this number was limited to around 463,000.

In Ashad, the last month of the financial year 2079-80, land transactions decreased compared to Jestha, with only 44,485 documents being processed. In Jestha, the number of transactions reached 55 thousand 69. Jestha recorded the highest transactions for the financial year 2079/80.

According to the department, 42,461 land deeds were processed in Baisakh, and 49,150 in Chaitra. In the last Falgun, 40 thousand 734 documents were processed, 41 thousand 86 in Magh, 38 thousand 831 in Poush, 29 thousand 184 in Mangsir, 27 thousand 939 in Kartik, 25 thousand 789 in Asoj, 34 thousand 720 in Bhadra, and 33 thousand 734 in Shrawan. After dropping to about 26,000 in the last Asoj, the monthly written pass has been slowly increasing again.

In the last financial year, the government lost a significant amount of revenue due to the decrease in the sale of land. The real estate revenue decreased by about 29 percent, totaling only Rs. 41 Arba 15 crore 76 lakhs. Whereas the previous year, such revenue collection was Rs. 57 Arba 66 crores 99 lakhs.

The plotting of land has decreased considerably this year. Compared to the financial year 2078/79, the plotting (kittakat) has decreased by about 60 percent. In the financial year 2079-80, 285,000 plots were divided, and 6,39,000 plots were retained. However, in FY 2078/79, 694 thousand 213 plots of land were divided into 16 lakh 12 thousand plots.

Last year, the slowdown in land transactions had an impact on the overall economy and government finances. For this reason, the government is currently working on amending the rule that land cannot be allotted without classification. However, the real estate business is dissatisfied with the delay.

For this reason, in the budget statement brought by Prakash Sharan Mahat for the current fiscal year 2080/81, it was said, 'The purchase of land, which has been withheld for some time, will be released. I believe that this will expand the business of the real estate sector.'

However, according to the announcement, the allocation of land has not been opened yet. The Land Management and Archive Department has not yet issued any instructions or circulars to open the blocked land parcels, and the situation remains unchanged.

According to the department, the legal knot is yet to be untied to open the land auction, as the First Amendment Regulations-2079 need to be amended to open the land registry. The Ministry of Land Management, Cooperatives, and Poverty Alleviation is preparing for this.

The land use regulations issued on 23rd Jestha, 2079, provided that land can be classified as agricultural, residential, commercial, industrial, mining and mineral, forest, river, lake, wetland public use, cultural and archaeological importance area, and other areas designated by the government.

Since Bhadra, 2079, the government has arranged that there will be no allocation of land unless agricultural and non-agricultural land is separated at least within the local level. Land transactions were affected in many places because the local level could not allocate land due to the absence of land classification by the Land Use Council.

In order to make it easier, the Council of Ministers decided to open the section last Baisakh, but the decision could not be implemented after the relevant ministries drew attention to it. Accordingly, the Council of Ministers sought additional homework before revising the regulations.

The Council of Ministers had instructed the Ministry of Land Management, Cooperatives, and Poverty Alleviation to send a proposal again regarding the legal basis and subject matter of opening Kittakat. It was instructed to make a proposal to make the economic sector operational and to address the problems of implementation of the regulations.

The land use regulations stipulate that the local level can allocate land only after separating it as arable and non-agricultural land. According to this, only about 170 local levels have finalized the classification, and others are in confusion.

After the decision of the Council of Ministers to open the sale of land was stopped without implementation, real estate businessmen have been demanding to open it quickly.

In recent days, the real estate business has improved due to the increase in investable capital in banks. Investments in real estate have started to increase after banks have started accumulating investments, which has led to a rise in real estate transactions again. 

Businessmen have been saying that other sectors of the economy have also slowed down after the real estate business slowed down. Investors in 'real estate' have been saying that there is a problem after the real estate is not sold due to a recession.

The Nepal Land & Housing Developers' Association is demanding the implementation of the decision to release Kittakat. Objecting to the slowness in Kittakat release, the association claims that the overall economic activity of the country is slowing down because the real estate sector is not functioning.

The federation said that despite the announcement from the Prime Minister to facilitate the sale of real estate, the decision of the Council of Ministers on Baisakh 5 to facilitate the sale has not been implemented yet.