Realty market fails to pick up in Valley
KATHMANDU:
Real estate business has failed to pick up in Kathmandu Valley, as buyers are still waiting for property prices to go further down — albeit transactions have started increasing outside the capital.
In the first four months of the current fiscal year, land revenue offices in the Valley raised Rs 774.23 million in land registration fee — one of the most reliable indicators to gauge real estate transactions. The registration fee collected in the period marked an increment of a mere 2.09 per cent than in same period a year ago.
“Real estate business has not taken off in the capital as buyers are still waiting for prices to go down,” Commerz and Trust Bank CEO Anal Raj Bhattarai said.
According to Bhattarai, real estate prices in the Valley have gone down by as much as 60 per cent since the peak in fiscal 2008-09, when land prices were doubling in a matter of a week. “But buyers are expecting prices to go down by another five to 10 per cent,” he said. “As a result they have adopted a wait-and-watch approach.”
Statistics provided by the Department of Land Reform and Management (DoLRM) reveal that the three land revenue offices in Kathmandu district collected land registration fee of Rs 529.08 million in between mid-July and mid-November — a fall of 3.76 per cent than in the same period a year back.
Land registration fee collection also did not go up in Lalitpur district during the period, recording a mere growth of 0.8 per cent to Rs 145.21 million. However, land registration fee collection in Bhaktapur district jumped 54.8 per cent to Rs 99.94 million during the four-month period, DoLRM data show.
The real estate market in Kathmandu Valley had started cooling down after Nepal Rastra Bank — central bank — tightened noose around speculative lending following overheating of the market in 2008-09. In one instance, the central monetary authority had asked banks and financial institutions to reduce realty credit exposure to 30 per cent of total lending by mid-July 2011, and 25 per cent by mid-July 2012. At that time, the central bank had also asked banking institutions to put a 60 per cent cap on loans issued against security of real estate.
Since then the property market in the Valley has failed to pick up, although confidence is gradually being restored in the property market outside the capital.
The latest statistics of DoLRM show that collection of land registration fee across the country jumped 22.59 per cent to Rs 1.8 billion in four-month period, led by rise in collection of fees in districts such as Kaski, Rupandehi, Chitwan, Dang, Kavre, Jhapa, Lahan and Saptari, among others.
The land revenue office in Kaski district, for instance, collected Rs 98.06 million in land registration fee in the four-month period, up 28.5 per cent than in the same period last year, while the office in Rupandehi raised Rs 77.27 million in land registration fee during the period, marking an increment of 65.6 per cent than in the same period a year ago.
Similarly, land revenue office in Chitwan collected Rs 68.16 million in land registration fee during the period, up 17.64 per cent than in the same period last fiscal, while registration fee collection in Sunsari went up by 12.53 per cent to Rs 60.54 million during the first four months.
source: THT
