Pokhara: Real estate developers have started selling land plots by lowering prices by up to 40 percent because of high interest rates on bank loans.

“I am selling land plots even though I am facing loss to recover my investment. I have lowered prices by up to 40 percent,” a real estate developer told Republica.

 
“I invested Rs 8 million in the hope of handsome return and waited for about eight months waiting for the price to rise. But now, no one seems in the mood of buying,” he said, preferring anonymity.

“It is better to sale in cheap price rather than pay high interest of loans.”

The developer further informed Republica that he had already sold two ropanis of land by lowering the prices.

Another developer Bindu Thapa informed that he has lowered prices by up to 35 percent due to slowdown in land transactions. “I am selling land plots at Lekhnath Municipality by lowering prices by as much as 35 percent,” Thapa said, adding, “It´s better to sale by lowering price than to put investment in risk.” He said slowdown in realty business emerged after Nepal Rastra Bank tightened real estate lending.

Thapa, who is also one of the largest real estate developers in the lake city, said newcomers in the business are hardly hit by the slowdown in business.

According to conservative estimate, more than 1,000 people have jumped into real estate business in Pokhara. They have developed residential plots on ore than 10,000 ropanis.

Records of Kaski District Land Revenue Office show that land transaction in the district has declined after the central bank tightened realty lending. The office collected Rs 392.8 million as land tax in fiscal year 2009/10, which was Rs 11 million higher than the target set for the period.

source: Adhikari, M. (2010),"Pokhara realtors lower land prices ",myrepublica, 13 August 2010