At a time when the real estate sector was pinning hopes on the budget to address their problems, the private sector seems a little down as no issues regarding the sector was directly addressed. However, realty developers cheered the timely announcement of the budget for the fiscal year 2014/15 and believed that it will help improve the whole economic sector.

The budget promises to make a joint effort to incorporate all — government, cooperatives and private housing projects — to develop safe, planned, economic and environment friendly housing system.The government has also planned to develop urban infrastructure in Biratnagar, Birgunj, Butwal, Dharan, Janakpur and Nepalgunj municipality including the development of 10 urban corridors with eight ongoing and two new.

The private sector seems a little disappointed as the budget has not addressed their nine-point demand. “The budget did not address any issue regarding the real estate sector although this budget will certainly create an environment to boost the real estate sector,” said Ichha Raj Tamang, President of Nepal Land and Housing Developers Association (NLHDA). Citing that there is no policy barrier for the growth of the sector, he said, “Despite high demand and adequate liquidity surplus, banking institutions are reluctant to invest in the realty sector causing a negative impact.” According to him, the central bank has to address the issue through monetary policy for the improvement of the sector.

Talking about the government’s plan to develop urban infrastructure outside the valley, Tamang said, “This is positive news for the realty sector and it will provide tremendous scope for real estate developers.” According to him, the central bank has put a ceiling of 25 per cent exposure to the real estate sector but banks and financial institutions are only ready to expose around 10 per cent.

“The fiscal policy vision to attract private developers for planned housing for urban development is a positive aspect,” said Minman Shrestha, General Secretary of NLHDA. Citing that the monetary policy and detailed work-plans are yet to come, Shrestha said, “The government’s priority on hydropower, tourism and agriculture is indeed positive. And this certainly will have positive effect in other corresponding sectors along with the realty sector.”

Stressing on the need to make implementation stronger, he said, “With the allocation of budget on time, the government also has to implement plans and programmes and spend the development budget on time for overall development.” In addition, developers are expecting the detailed work-plan regarding property purchase by non-resident Nepalis within this fiscal.

“The presented budget for the upcoming fiscal year is encouraging for urban development,” said Yogeshwor Parajuli, Chief Commissioner of Kathmandu Valley Deve-lopment Authority. Citing that the political will seems strong for urban development, he said, “The provision that there should be town planning to start any new construction in newly declared municipalities is a significant step to planned urbanisation.”

Urban development is directly linked with urban planners, private real estate developers, government agencies and other interrelated industries. He stated that the implementation of sketched plans and policies will be needed for the development of the planned urbanisation.

source: the himalayan times,19 july 2014