Realty transactions have continued to see downward spiral especially in Kathmandu.

This came after the the Nepal Rastra Bank (NRB), through the monetary policy, brought policy to divert realty loans to housing from land.

Revenue collection from realty transactions at five Land Revenue Offices (LROs) in the Kathmandu Valley dropped to 58.28 percent in the first five months of the current fiscal year compared to that of the same period last fiscal.

The offices collected Rs 641.53 million as registration taxes, against Rs 1.53 billion last year.

According to the bankers, they are facing a hard time in recovering realty loans owing to stagnancy in realty transactions.

The commercial banks lent Rs 98.2 billion to the realty sector including both housing and land in the first quarter of the current fiscal year. This accounts for 20 percent of the banks’ total loan portfolio that stands at Rs 481.91 billion in the first three months.

The monetary policy for the current fiscal year has instructed the banks and financial institutions (BFIs) to bring down their lending for land to 10 percent and housing to 25 percent.

source: NepalNews.com (2011),"Kathmandu sees realty transactions going down by 57.28 percent",NepalNews.com, 11 Jan 2011