Realty sales continues to grow even after festive season
KATHMANDU, Jan 7: Realty market that enjoyed a rise in sales since the onset of festive season sustained the growth in the 5th month (mid-November to mid-December) of this fiscal year as well, as purchases of small residential plots picked up even after the end of Tihar and Chhath festivals.
Cumulative data of land and housing transactions at the five Land Revenue Offices (LROs) shows that sales of property during the 5th month of 2012/13 rose by an average of around 20 percent in the Kathmandu Valley, compared to the same month last year.
“However, records of individual LROs suggest the market is still unstable, as transactions have not grown evenly in all the parts of the Valley,” said Tulasi Ram Vaidya, officer at Department of Land Reforms and Management (DoLRM).
In fact, data compiled by the DoLRM shows land and housing transactions in the northern and north-eastern parts of Kathmandu, which is recorded by Chabahil LRO, dipped by more than 27 percent during the month.
However, volume of transactions at Dillibazar LRO, which registers transactions carried out in the core city areas and north-western part of Kathmandu has soared by more than 56 percent than the figure recorded in the same month last year.
Transactions at Kalanki LRO, which registers deals made in western and south-western part of Kathmandu, grew by a meager 8 percent, while transactions in Lalitpur and Bhaktapur rose by more than 20 percent.
As a result, the government mobilized Rs 170 million in revenue from the fresh property deals in the Valley during the month of mid-November to mid-December, 2012. “The collection is 20 percent higher than the amount mobilized in the same month in 2011/12,” said Vaidya.
Total transaction recorded during the 5th month was 26 percent higher than the transactions of the previous month (mid-October to mid-November).
Realty market that cast gloomy look since first half of 2010 has started to regain some vibrancy since the first quarter of this fiscal year, as price cuts and special festive offers pulled more buyers, boosting sales both in and outside the Valley.
“Mainly sales of smaller residential plots have picked up in recent months, mainly as people holding land in cities outside the Valley where prices are still continuing to rise are selling the property to buy plots in the Valley” said Vaidya.
The realty market, which became overheated in 2009, had subsequently slowed down and stagnated after Nepal Rastra Bank (NRB) in December, 2009 imposed a cap on realty loans, citing hefty exposure of banks and financial institutions to speculative buying and risks that emanated in the financial system.
In recent months, however, the central bank has relaxed some of its provisions on home loans. Reeling under pressure to repay loans, developers of late have also started offering discounts of up to 30 percent.
Officials attributed these factors for the fresh rise in sales of land and houses in the Valley.