The land and house registration revenue collected in 2012 exceeded the set target, giving an optimistic outlook to the realty sector. The Department of Land Reform and Management (DoLRM) acquired Rs 4.843 billion in registration revenue of land and house transaction against the target of Rs 4.5 billion. “The realty sector is slowly recovering, though not taking up the expected momentum based on its potential,” says Kamal Timalsina, undersecretary of DoLRM, further stating that political instability stands as the main road block for growth.

“Another challenge for the year was the delayed budget. While the budget is the main determinant about the fiscal year, the partial budget hindered implementation of government provisions made last year,“ says Minman Shrestha, general secretary of Nepal Land and Housing Developers' Association.

Despite the setbacks, he says the favourable environment for business growth, banks reducing the interest rates for home loans from 15 to 16 per cent to 10 per cent, the government's process to prioritise first time buyers and civil servants, and positive steps taken to uplift the industry cannot be ignored.

According to him, the sector witnessed 20 to 25 per cent boost in terms of bookings and transactions.
However, the year was not so fruitful for apartments. Of the 30 companies specialising in apartments, 71 projects are in different phases of construction phases of construction and completion. “The big blow was when a few companies, who were handling 50 per cent of the projects, were blacklisted. This evidently resulted in adversely affecting the apartment sector,“ Shrestha says, informing the number of bookings for apartments had been halved in the recent months. “The situation, nonetheless, is slowly getting better,“ he says.

With the average annual demand for 43,000 units of houses, experts claim there is a huge scope for the industry. However, lack of support and reluctance to invest in apartments by banks are the major challenges facing the sector.

“In 2012, we introduced projects by tapping into the needs of genuine buyers, which is why we were able to garner a significant growth of 20 per cent against last year,” says Bijay Rajbhandary, chairman of CE Construction.

According to him, launching of diverse projects that catered to high-end to low-end customers and the trust they have amassed over the years could be accredited for their success. CE launched five projects in 2012, with price of one unit ranging from Rs 4.5 million to above Rs 20 million.

“The initial three months were harsh, but towards mid-year the situation steadily improved. However, because of the scandals created by a few developers, customers lost the confidence to invest in property,” says Narendra Bajracharya, director of The Comfort Housing (TCH) Pvt Ltd.

TCH had sales of 25 to 30 units of completed projects. Stating that the trend of market had shifted, he asserts, “Customers these days have become more aware and now they prefer to invest in completed projects rather than those in construction phase — the situation was just the reverse a few years back.” Bajracharya says that the interest rates on home loans should be revised to provide some relief to developers. Being optimistic about the coming year, he says, “Hopefully the government will stabilise in the coming year, thereby helping the realty sector to bounce back to its lost glory.”


Projects Launched in 2012
> Grande Villa Phase II
> Veena's Residency Phase II
> Veena's Colony IV
> Prime Colony, Thadodhnga
> Panipokhrari Heights
> TCH Thaiba Phase II
> Comfort Enclave
> Comfort Residency
> Project In Sanobharyang Ringroad

source: The Himalayan Times,29 Dec 2012