Eight years ago, when the housing business began in Kathmandu, it brought a revolution in lifestyle of the middle class people. It brought new hope to the middle class families wanting to buy houses at affordable prices.

But the idea of building and selling houses was not totally new. The Chaudhary Group had already introduced the concept of multi-storey apartment system at a time when Nepal’s housing sector had not quite developed. However, building a colony of separate bungalows was a new idea till then.

The concept of real estate and housing came to Kathmandu around 1990 but it took almost a decade to catch on. Prior to that, the busy people of the city would plan for almost five years to build their own houses. The housing industry spared them from the burden of long and arduous task of finding a location for constructing a building, collecting materials and so on and so forth. Similarly, the luxurious and well-facilitated housing that offered European and American lifestyle within the colony lured the moneyed class to communal living.

Minman Shrestha, general secretary of Nepal Land and Housing Developers’ Association (NLHDA), said Civil Homes, Comfort Housing and Sunrise Housing Company constructed separate houses as per the desire of the people in 2059. Civil homes had constructed separate houses in Bhaishapati in the first phase in 2059. Similarly, the Comfort and Sunrise Housing companies constructed separate houses in Sitapaila and Balkumari respectively in the same year.

The housing system has been gradually pickling up in Kathmandu due to increasing trend among people to live in high standard bungalows, he noted. The demand for housing - both separate and apartment - has been increasing in the country because people living in them can avail of various many facilities. According to Shrestha, the housing companies have been providing many facilities including security, supply of drinking water, electricity backup, garden, children playground, physical fitness, ATM service, swimming pool and others.

According to Shrestha, the price of houses and apartments varies based on the housing company and its facilities and location. He said that the price of apartment housing ranges between Rs. 1.3 million to Rs 12.5 million. The middle class people have been buying the low cost accommodations while the high class people including businessmen, engineers and doctors buy the high rate apartments. The unit which costs less is small but a high price flats have many facilities.

Similarly, the houses are being sold at Rs. 8 million to Rs. 25 million. Shrestha said that the price of two to two-and-a-half storeys homes range at or above Rs. 8 million. The high class people who want to live in a separate house are buying these types of homes.

The payment system is different as per the company and interest of the people who want to buy the house or apartment. Most of the clients want the following mode of payment for their house but the payment system depends on the housing company rules.

The prospective buyers want a good location site, uniform land, usage of good quality of building materials, affordable cost, playground, school, health center and public transportation facilities etc.

In the recent years, housing was considered to be a good sector for investment. Most Nepalese want to live in Kathmandu for various reasons. Especially middle class families and Nepalese living overseas want to invest in houses. During the last three years, the real estate business really prospered and helped generate businesses and jobs for many people, Shrestha said.

So far around Rs. 85 billion has been invested in the real state sector across the country and some 300,000 people have got job opportunities in building construction, he said, adding that after hand over the buildings around 20 people get job in each colony.

The housing companies have to acquire permission from Kathmandu Valley Town Development Committee (KVTDC), Ministry of Physical Planning and Works, Municipality Development Board, Department of Buildings and other concerned bodies. "It is a long and cumbersome process to construct the apartment housing," he said. "The government should bring all those bodies in one window to encourage the housing companies."

There are around 150 housing companies in the country. According to NLHDA, around 33 housing projects had constructed about 1,900 units and 83 apartment projects had built around 7,901 units.

Shrestha informed that due to limited land availability and increase in its valuation, the demand for housing was gradually increasing in the country. "The private housing companies have been facing difficulties to acquire land for housing. So the government should take initiatives to pool the land from the owners and provide it to the housing companies which would help manage a well-developed town in the country," he said.

The new generation of young professionals want to live independently. Earlier, they would have had to save for 15-20 years to build their own dream houses. Now with this concept coupled with housing grants from banks, they can have a house within year.

Rohini Shrestha is a resident of Civil Homes housing colony at Bhaishapati. She has been living there for the last five/six years. She is enjoying as a resident of the colony as compared to other individual house.

She said, "We get good and friendly environment in the housing colony because many people are living here are cooperative."

She said that the housing companies are providing facilities such as telephone, drinking water, and security, among others.

According to her, the middle and high class people are living in the colonies because they lacked time to build the individual homes at the present context while the price of land and construction materials was very high.

She said that she owned a three bedroom house for which they had paid around Rs. 3.6 million six years back. "Not only me but also others who once live in a colony do not want to stay outside."

The government introduced Town Development Act 2045 for developing well managed urban city. However, the government had constructed Kuleshwor Hosing Project before enacting the law.

Er. Shambhu KC, member secretary of Kathmandu Valley Town Development Committee (KVTDC) under the Ministry of Physical Planning and Works, said that the government had introduced Town Development Act-2045 for developing and managing a well managed town. The Act had three main components - Site and Services Programme, Guided Land Development Programme and Land Pooling Programme.

The Site and Service Programme of the Act envisaged pooling the encroached land in the special sector by providing compensation to the owners. Under the Site and Service Programme, the KVTDC had launched the Kuleshwor Housing Project and Golphutar Housing Project which cover around 521 ropanies and 213 ropanies of land respectively. He said that the Site and Service Programme could not be effective in the present context when the price of land was very high.

Similarly, Land Pooling Programme aimed to pool the land of the farmers and plan the land and give it to the concerned farmers themselves after planning. The KVTDC has pooled the land and developed infrastructure for constructing the buildings and handed over the land to the concerned farmers, KC said. The KVTDC has so far completed around 12 such projects in the valley. Under the Land Pooling Project, it had launched Dallu Hopusing Project ( 396 ropanies) Naya Bazaar ( 840 ropanies), Gangabhu (282 ropanies), Chabahil Gopikisshna ( 201 ropanies), Bagmatiphat Jwagual area (197 ropanies), Kirtipur "irst ( 107 ropanies), Kamal Vinayak "irst ( 145 ropanies), Libali Bhaktapur (670 ropanies), Lubu Lalitpur ( 269 ropanies), Sintitar Bhaktapur ( 525 ropanies), Saibhu Bhaishapati ( 552 ropanies) and Sinamangal ( 901 ropanies). The 12 projects have covered around 10,000 ropanies of land.

Similarly, Bagmatinagar project at Kathmandu, Kamerotar project at Bhaktapur, Nakhudol at Lalitpur are the undergoing project of the KVTDC.

Likewise, Guided Land Development Programme was implemented in different places which only provided guideline for the planning.

KC said that the Land Pooling is one of the effective programemes of the government to effectively manage urban housing in the country as compared to the Site and Service Programme.

He said that the private sector had taken initiatives to develop housing in Nepal in the past few years. The housing developers should first submit the planning at the KVTDC. After receiving permission from the KVTDC, they go to other bodies to take permission for building construction as per the planning of the project. He informed that KVTDC had provided planning license to more than 200 groups and separate housing companies for constructing more than 6,000 units.

Ichha Bahadur Wagle, 2nd vice president NLHDA, said that the private sector had come in the housing sector from 2055 BS considering the increase in the flow of remittance in the country as well as increased land transaction in the valley. Though the concept came in 2000, rapidly picked up develop from 2005.

He said that the housing system could not develop as expected due to the lack of effective laws related to housing let alone the poor implementation of the existing Act.

He blamed that Nepal Rasta Bank had restricted the banks to invest in the housing and real estate sector which led to negative growth in the housing business. He urged the NRB to amend the policy and provide loans in the housing sector too.

He said that the housing companies had introduced the concept of high rise buildings in the country. Under the concept, Sunrise Company had constructed 28 flats housing in Dhobighat in 2063. The other companies have followed Sunrise. Oriental Housing Company has constructed the high risers in Balkhu. The housing companies are allowed to build upto 19-storey apartment buildings so far.

The concept of high rise apartment is very effective because many people can stay in a single building. Most builders have constructed houses taking advance from the people. He, however, said that Rose Village had constructed 64 homes without taking advance from the people, the first company to build without taking advance form the clients. It opened the booking only after completing construction.

He said that the housing companies gave people a chance to buy homes and apartments as per their economic status. He however added that the industry did not develop as per the necessity of the Nepalese people.

source: Kafle, L. (2010),"Housing Proliferation In Kathmandu ",Rising Nepal, 28 June 2010