The real estate business is showing sign of recovery in the main cities around the country, eclipsing Kathmandu Valley in the number of transactions, reveals a Nepal Rastra Bank ( NRB ) study.

The number of house and land registration has also been on the rise, thanks to the increase in investment from the banks and financial institutions.

The survey conducted by Nepal Rastra Bank in 42 districts around its eight offices has found the rise in the number of real estate registration and building design approval. The registration of real estate has increased by 8.7 percent in those districts in the first six months of the current fiscal, according to the study conducted in Kathmandu, Biratnagar, Janakpur, Birgunj, Pokhara, Siddharthanagar, Nepalgung and Dhangadhi. It had decreased by 6.6 percent in the same period last fiscal year.

At 18.6 percent, Nepalgunj has recorded the highest growth in the period, according to NRB . Biratnagar has come second with a 17 percent growth, followed by Pokhara (14.2), Birgunj (6.5).

Kathmandu has the lowest growth rate among the surveyed districts, with a growth of 4.8 percent. The real estate business in Kathmandu has declined since the central bank imposed celing on realty lending in 2009. 

Despite the growth in the real estate business, the rate of ownership transfer has remained low, said Om Rajbhandari, vice-president of the Nepal Land and Housing Developers’ Association. “In the last three years, all the housing projects have been finished.”

An NRB official said that people are waiting the price to come down, further slowing down the growth. 

The realty transactions have come down in two urban centres, Janakpur and Dhangadhi by 7.8 percent and 20.7 percent respectively.

Besides the growth in real estate business, the construction of new houses has also been on the rise. The first half of the fiscal year witnessed a 5.1 percent increase in building design approval for houses and complex—a marked improvement from the slide of 0.01 percent in the same period last fiscal year.

The rate of building design approval has, however, dropped in Kathmandu, Pokhara, Birgunj and Dhangadhi compared to the last fiscal year. This means that construction of houses by individual has come down in those places.

The revenue from real estate registration in the current fiscal year has increased by 31.5 percent, to Rs 2.55 billion. It had decreased by 0.3 percent during the same period last fiscal. The lending by banks and financial institutions in the current fiscal has decreased a bit as compared to last year.

According to the financial reports published by the commercial banks, the lending in the housing and land sectors has increased by 8.9 percent in the first nine months of the current fiscal year.

source:the kathmandu post,23 may 2013