At least 24 per cent of standalone housing units and 49 per cent of apartments built by housing developers in Kathmandu Valley are yet to be sold, a latest survey shows.

The survey conducted among 44 per cent of housing projects and 33 per cent of apartment projects in the Valley shows that 1,975 stand-alone housing units and 4,307 apartment units are still vacant and awaiting clients.

Of the samples taken in the survey, 977 housing units and 1,860 apartment units were located in Kathmandu district and 998 housing units and 2,447 apartment units were located in Lalitpur district. Construction of these projects began as early as 2060 BS (2003-04) and a total of Rs 64.04 billion has been invested in them.

Considering the trend at which housing and apartment units are being sold, it might take between 14 to 41 months
to clear off the inventory, says the survey report.

Currently, there are 50 housing projects and 66 apartment projects in the Valley. These projects comprise 2,196 standalone housing units and 6,426 apartment units.

Kathmandu Valley had seen launch of largest number of housing and apartment projects in 2065 BS (2008-09), when the real estate business had reached its peak. In that year alone, foundations for 23 apartment projects and eight housing projects were laid.

But as the bubble started growing bigger, Nepal Rastra Bank tightened the noose around banks and financial institutions, which prevented easy money from passing onto real estate developers and speculators. Then in 2066 BS (2009-10) the number of apartment and housing projects declined by 52 per cent and 50 per cent, respectively, shows the survey report titled ‘Kathmandu Valley Real Estate Market Out
look 2013’ prepared by Brihat Investments.

The report shows that demand is particularly high for lower-end housing and apartment units priced between Rs five million to Rs 10 million.

For instance, 702, or 82 per cent, of the 858 housing units priced between Rs five million and Rs 10 million included in the sample, were sold out till July.

In the case of apartment units, 829, or 72 per cent, of 1,147 units with similar price range included in the sample were sold till July.

Similarly, 816 apartment units with price tag of less than Rs 50 million were also sold till that period, says the report, which was handed over to Nepal Land and Housing Developers Association by executive chairman of Brihat Investments Om Rajbhandary.

Of the total samples taken in the survey, 858 housing units were priced between Rs five million and Rs 10 million, 570 housing units came with price tags ranging from over Rs 10 million to Rs 15 million, 386 housing units were priced at over Rs 15 million to Rs 20 million, and 161 housing units bore price tags of over Rs 20 million.

Similarly, among samples of apartment units, 1,904 units were priced at below Rs five million, 1147 were priced between Rs five million and Rs 10 million, 384 units came with price tags ranging from over Rs 10 million to Rs 15 million, 635 units were priced at over Rs 15 million to Rs 20 million, and 237 units bore price tags of over Rs 20 million.

“As demand is high for lowend units, housing sector should now focus on catering to middle-income groups by introducing affordable housing and apartment projects,” Nepal Rastra Bank deputy governor Maha Prasad Adhikari said.

Sudhi Khatri, CEO of Grand Bank and vice president of Nepal Bankers’ Association, also made similar suggestion.

source: the himalayan times,9 Oct 2013